Discussion Paper 14: Sexual Harassment in Garment Factories: Firm Structure, Organizational Culture and Incentive Systems

7 Mar 2014

Analyzing a micro-data set of worker demographics and workplace characteristics in Haitian, Jordanian and Indonesian apparel factories, we test four hypotheses concerning the determinants of reports of sexual harassment.

These include the vertical alignment of incentives within the factory, the level of organizational awareness, sexual harassment as a form of worker discipline and sexual harassment as a form of supervisor compensation. Empirical analysis indicates that sexual harassment arises in part when supervisors are charged with assessing the individual work performance of their subordinates for the determination of production related pay incentives.
Sexual harassment is positively correlated with presence of worker-level incentives, the level of worker compensation and complaints of supervisor behavior. Sexual favors as a form of bribe for a positive work-effort report is more common in factories with low organizational awareness, as reflected in the human resource manager’s perception of sexual harassment as a concern, and supervisor training.
Sexual harassment is also more common in factories lacking nearby competitors, suggesting that intensified competition among factories for labor deters sexual harassment. There is some evidence that sexual harassment is a form of worker discipline but little evidence that sexual favors are a form of supervisor compensation.

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