Does Performance Pay Increase Job Satisfaction?

C Green, John Heywood

    Research output: Contribution to journalArticle

    91 Citations (Scopus)

    Abstract

    This paper investigates the influence of performance-related pay on several dimensions of job satisfaction. In cross-sectional estimates performance-related pay is associated with increased overall satisfaction, satisfaction with pay, satisfaction with job security and satisfaction with hours. It appears to be negatively associated with satisfaction with the work itself; yet, after accounting for worker fixed effects the positive associations remain and the negative association vanishes. These results appear robust to a variety of alternative specifications and support the notion that performance-related pay allows increased opportunities for worker optimization and does not generally demotivate workers or crowd out intrinsic motivation.
    Original languageEnglish
    Pages (from-to)710-728
    Number of pages19
    JournalEconomica
    Volume75
    Issue number300
    DOIs
    Publication statusPublished - 1 Nov 2008

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