What Makes Performance-Related Pay Schemes Work? Finnish Evidence
AbstractWe analyze how features of performance-related pay (PRP) schemes affect their perceived motivational effects using a Finnish survey for upper white-collar employees from 1999. The results show that the following features are important for a successful PRP scheme: (i) the employees have to feel they are able to affect the outcomes; (ii) the organizational level of the performance measurement should be close to the employee: individual and team level performance measurement increase the probability that the scheme is perceived to be motivating; (iii) employees should be familiar with the performance measures; (iv) the level of payments should be high enough and rewards frequent enough. Levels below the median do not generate positive effects; (v) employees should participate in the design of the PRP scheme. Copyright Springer 2006
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Bibliographic InfoArticle provided by Springer in its journal Journal of Management & Governance.
Volume (Year): 10 (2006)
Issue (Month): 2 (05)
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Web page: http://www.springerlink.com/link.asp?id=102940
design of incentive schemes; effort provision; employee involvement; motivation; performance-related pay;
Other versions of this item:
- Kauhanen, Antti & Piekkola, Hannu, 2004. "What Makes Performance-related Pay Schemes Work? Finnish Evidence," Discussion Papers 929, The Research Institute of the Finnish Economy.
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