Fascinating forthcoming paper on uptake of innovation in manufacturing, based on an experiment in the football-making capital of the world, Sialkot in Pakistan. Basically, workers paid a piece rate told factory managers they didn’t like new, more-efficient equipment, fearing they would earn less in the period when they learning how to use it….
The problem boils down to different incentives. The cutters, who at most factories are paid by the piece, aren’t that concerned about their firm’s total output. They aren’t motivated to learn how to use a new piece of equipment, especially given that their production rate would probably drop during the training period. The new method also demanded a greater level of care from the workers. Tellingly, the first big factory to adopt the new technology was also one of the few that paid workers by the hour rather than by the piece.