Transcript The Modern Firm in Theory & Practice Nick Bloom (Stanford Economics and GSB) Lecture 12: Incentives: Safelite glass case Nick Bloom, 149, 2015

The Modern Firm in Theory &
Practice
Nick Bloom (Stanford Economics and GSB)
Lecture 12: Incentives: Safelite glass case
Nick Bloom, 149, 2015
1
These guys replace broken windshields
Nick Bloom, 149, 2015
Overview the case
Nick Bloom, 149, 2015
Overview the case
Moved in early 1990s from in-store to mobile
Moved to process claims for insurance
companies
1993-1997 introduced PPP, could hit old
levels with slightly higher performance.
12 weeks initial guarantee lowered to 70%
of old rate
Nick Bloom, 149, 2015
“Some of the technicians play too much
time playing pinochle” said one manager
Nick Bloom, 149, 2015
Why was the Safelite productivity so low?
Nick Bloom, 149, 2015
Did the new performance pay plan address
the issues? Did it add new problems?
Nick Bloom, 149, 2015
What are the general pros and cons of
going from flat rate piece rate?
Nick Bloom, 149, 2015
Are Safelite installers good candidates
for piece-rate pay?
Nick Bloom, 149, 2015
Should there be a guaranteed wage?
Nick Bloom, 149, 2015