Article2009

CONFRONTING OBJECTIONS TO PERFORMANCE PAY: THE IMPACT OF INDIVIDUAL AND GAIN‐SHARING INCENTIVES ON JOB SATISFACTION

Konstantinos Pouliakas · Ioannis Theodossiou

61 citations0/0 files storedScottish Journal of Political Economy

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Job Satisfaction and Organizational Behavior Employee Performance and Management Labor market dynamics and wage inequality

Abstract

ABSTRACT The increasing use of incentive pay schemes in recent years has raised concerns about their potential detrimental effect on intrinsic job satisfaction (JS), job security and employee morale. This study explores the impact of pay incentives on the overall JS of workers in the United Kingdom and their satisfaction with various facets of jobs. Using data from eight waves (1998–2005) of the British Household Panel Survey (BHPS) and a uniquely designed well‐being dataset (EPICURUS), a significant positive impact on JS is only found for those receiving fixed‐period bonuses. These conclusions are robust to unobserved heterogeneity, and are shown to depend on a number of job‐quality characteristics that have not been controlled for in previous studies.

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References

2001Econometric Analysis of Cross Section and Panel Data 1985Intrinsic Motivation and Self-Determination in Human Behavior 1988Intrinsic Motivation and Self-Determination in Human Behavior 1983Limited-dependent and qualitative variables in econometrics 1979Moral Hazard and Observability 1991Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design 1971Effects of externally mediated rewards on intrinsic motivation.2005Happiness: Lessons from a New Science

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2010Performance pay, risk attitudes and job satisfaction 2010Differences in the job satisfaction of high‐paid and low‐paid workers across Europe 2009Crowding out public service motivation 2022Job satisfaction and trade union membership in Germany

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