Do Factory Managers Know What Workers Want? Manager–Worker Information Asymmetries and Pareto Optimal Human Resource Management Policies

Paris Adler, Drusilla Brown, Rajeev Dehejia, George Domat, Raymond Robertson
2017 Asian Development Review  
This paper evaluates the conjecture that factory managers may not be offering a cost-minimizing configuration of compensation and workplace amenities by using manager and worker survey data from Better Work Vietnam. Working conditions are found to have a significant positive impact on global life assessments and reduce measures of depression and traumatic stress. We find significant deviations in manager perceptions of working conditions from those of workers. These deviations significantly
more » ... s significantly impact a worker's perception of well-being and indicators of mental health. Such deviations may lead the factory manager to underprovide certain workplace amenities relative to the cost-minimizing configuration, which may in part explain the persistence of relatively poor working conditions in developing economies.
doi:10.1162/adev_a_00081 fatcat:gd3z67zf4je3rifuiwvutrbpv4