Payment by results. Leading system in production development.

Swedish experience of changes of payment systems indicates that there is a strong link between payment-by-results and the way the work organization functions. In fact the efficiency-promoting effects of payments-by-results to a great extent is explained by positive indirect effects on work forms, production planning and control, supervision and the readiness at the shop floor level to counteract and neutralize production disturbances and variations. This paper takes account of material from a study by Dr. Jan Edgren of changes in the payment system on the development, of events at a Gr<aum>nges die-casting shop. It is pointed out that the indirect effects of payment systems make payment-by-results a strategic factor or leading system in the development of the shop floor organization and work forms. The paper also presents an outline of some characteristics of the payment systems of the future. [ABSTRACT FROM AUTHOR]