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The role of performance-related pay in renegotiating the "effort bargain": The case of the British public service

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  • David Marsden

Abstract

Much of the academic and policy literature on performance-related pay (PRP) focuses on its role as an incentive system. Its role as a means for renegotiating performance norms has been largely neglected. This study examines the introduction of performance-related pay, based mostly on appraisals by line managers, in Britain's public services during the 1990s. Previous research indicates that PRP failed to motivate many of the staff and that its operation was divisive. Nevertheless, other information suggests that productivity rose. This article seeks to resolve the paradox using contract theory to show that performance pay was the instrument of a major renegotiation of performance norms, and that this rather than motivation was the principal dynamic. Goal-setting and appraisal by line managers played a key role in this process. (Author's abstract.) (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 57 (2004)
Issue (Month): 3 (April)
Pages: 350-370

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Handle: RePEc:ilr:articl:v:57:y:2004:i:3:p:350-370

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Cited by:
  1. David Marsden, 2006. "Individual employee voice: renegotiation and performance management in public services," LSE Research Online Documents on Economics 3629, London School of Economics and Political Science, LSE Library.
  2. David Marsden, 2007. "Individual employee voice: renegotiation and performance management in public services," LSE Research Online Documents on Economics 3531, London School of Economics and Political Science, LSE Library.
  3. Richard Belfield & David Marsden, 2005. "Performance pay for teachers: linking individual and organisational level targets," LSE Research Online Documents on Economics 3631, London School of Economics and Political Science, LSE Library.
  4. Alex Bryson & Richard B. Freeman, 2007. "Doing the right thing? does fair share capitalism improve workplace performance," LSE Research Online Documents on Economics 4964, London School of Economics and Political Science, LSE Library.
  5. Stéphanie Chatelain-Ponroy & Christine Musselin & Stéphanie Mignot-Gérard & Samuel Sponem, 2013. "Reforms in French Public Universities. How does commitment to performance match with commitment to public values?," Post-Print halshs-00842166, HAL.
  6. Richard Belfield & David Marsden, 2004. "Unions, performance-related pay and procedural justice: the case of classroom teachers," LSE Research Online Documents on Economics 3632, London School of Economics and Political Science, LSE Library.

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