Confronting Objections to Performance Pay: The Impact of Individual and Gain-sharing Incentives on Job Satisfaction

K Pouliakas, I Theodossiou

Research output: Contribution to journalArticle

18 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)662-684
Number of pages23
JournalScottish Journal of Political Economy
Volume56
Issue number5
Early online date1 Oct 2009
DOIs
Publication statusPublished - Nov 2009

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