Publication type
Research Paper
Series Number
2007-06
Series
University of Aberdeen Business School: Centre for European Labour Market Research Discussion Paper
Authors
Publication date
June 1, 2007
Abstract:
Using an econometric procedure that corrects for both self-selection of individuals into their preferred compensation scheme and wage endogeneity, this study investigates whether significant differences exist in the job satisfaction of individuals receiving performance-related pay (PRP) compared to those on alternative compensation plans. Using data from four waves of the British Household Panel Survey (BHPS), it is found that PRP exerts a positive effect on the mean job satisfaction of (very) high-paid workers only. A potential explanation for this pattern could be that for lower-paid employees PRP is perceived to be controlling, whereas higher-paid workers derive a utility benefit from what they regard as supportive reward schemes. Using PRP as an incentive device in the UK could therefore be counterproductive in the long run for certain low-paid occupations.
Subjects
Link
- http://auraserv.abdn.ac.uk:9080/aura/handle/2164/108
Notes
discussion paper
Paper download#509083