Abstract: The performance of a cooperative organization depends to a large extent on the productivity of its workforce and determines its survival and growth. It is therefore, imperative for cooperatives at national and local levels to explore ways of improving and updating environmental facilities in order to make the workforce more conducive and productive. The main objective of the study is to find out, whether any increment in wage payments of the laborers in industrial cooperatives, can be as an effective measure to cause a substantial increase in the rate of industrial cooperative's value added. For this purpose and in order to investigate the effects of compensatory payments received by the employees on their productivity, the Cobb-Douglas model and panel data regression analysis were designed to analyze the productivity performance of laborers working in industrial cooperatives of 30 provinces during the period 2006-2008. The results showed that the variable of compensatory payments including direct and indirect wage payments have positive and significant effect on Iran’s industrial cooperative's value added. That is concluded that any increase in wage can cause labor productivity increase in production in such a way that 1% increases in wage payment raises the average added value of industrial cooperatives by 0.184% while, 1% increases in other payments raises the average added value only by 0.124% in this sector.