DP 44: Piece Rate, Productivity and Occupational Health in the Global Economy

11 Oct 2021

Piece rate pay is a common form of compensation in developing-world industries, including the garment sector. While the piece rate may boost productivity, it has been shown to have unintended consequences for occupational safety and health, including increased accident and injury risk. Evidence from developing world industries and contexts is limited. This study explores the relationship between piece rate, worker health, and business strategy in a developing world case, the Cambodian garment sector. The research uses a mixed method study design, combining the results of a quantitative analyses of garment worker survey data with a qualitative assessment of managerial interviews at a subset of Cambodian factories. Workers paid by the piece report significantly higher rates of occupational injury (Odds Ratio=5.87), while the relationship between piece rate and other health outcomes was mixed (some positive, some negative). Management interviews highlight an important role for piece rate in strengthening industry competitiveness and the business bottom line. The results are extrapolated to characterize potential piece rate implementation scenarios that offer a win-win for both businesses and workers versus those that are largely exploitative of workers. These resu/wp-content/uploads/DP-44-Piece-Rate-Productivity-and-Occupational-Health-in-the-Global-Economy.pdflts address important gaps in our understanding of how piece rate impacts the health and safety of workers, as well as business strategy and competitiveness in developing world sectors. More research is needed to generalize these results and develop recommendations around best practices.


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