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Bonus Wages

Author

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  • Francisco Paulo Cipolla

    (Universidade Federal do Paraná, Curitiba PR, Brazil)

Abstract

This paper argues that bonus wages, understood as lump sum payments contingent upon the achievement of a firm’s production goals, are superior to piece wages from the point of view of capital. While bonus wages reproduce the main traits of piece wages they also generate a higher degree of cohesion on the shop floor due to self-interest and mutual surveillance among workers. It is suggested that bonus wages are better analyzed within a Marxian framework for they are a manifestation of the capitalist need for control both of the labor process and the process of valorization, a double aspect that is not considered either in wage efficiency theories or in radical theories of cost of job loss. It is argued further that bonus wages cannot be understood on the basis of reciprocity or fairness theories for they are the result of conflict rather than the outcome of mutual comprehension and a taste for equity. It concludes that the separate goals of discipline and incentive are collapsed together because the use of bonus wages for incentive in the form of a bonus acts as an instrument of discipline.Jel Classification: B 51; J33

Suggested Citation

  • Francisco Paulo Cipolla, 2013. "Bonus Wages," Review of Radical Political Economics, Union for Radical Political Economics, vol. 45(3), pages 369-383, September.
    • Handle: RePEc:sae:reorpe:v:45:y:2013:i:3:p:369-383
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