The purpose of this thesis was to test the theory of wage incentives, as presented in the literature, to determine if the theory is sound when applied to work situations.

Data were collected by means of a survey of manufacturing plants within the state of Virginia. Questionnaires were sent to a randomly selected sample of 294 plants from among the 20 manufacturing industry classifications.

It was determined that in those manufacturing plants in which wage incentive plans are applicable, they result in increased earnings for hourly workers, increased productivity of these workers, and decreased unit labor costs. It was further determined that unionism has no apparent effect on the use of these plans.