IDEAS home Printed from https://ideas.repec.org/a/bla/indres/v61y2022i4p327-352.html
   My bibliography  Save this article

Performance pay, working hours, and health‐related absenteeism

Author

Listed:
  • Jed DeVaro

Abstract

Analysis of broad, U.K. worker‐establishment matched panel data from 2004 to 2011 reveals that working hours increase with the fraction of an establishment's workers receiving performance‐based pay, if the cutoff for “long weekly hours” is from 35 to 39, but not beyond a sharp discontinuity at 40. Long hours are found to be unrelated to various workplace health problems but positively related to health‐related absenteeism. Combined with complementary research on hours and productivity, the results suggest that the well‐known productivity enhancements from performance pay are dampened by exhaustion‐induced absenteeism stemming from additional working hours and higher per‐hour work intensity.

Suggested Citation

  • Jed DeVaro, 2022. "Performance pay, working hours, and health‐related absenteeism," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 327-352, October.
    • Handle: RePEc:bla:indres:v:61:y:2022:i:4:p:327-352
    DOI: 10.1111/irel.12308
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/irel.12308
    Download Restriction: no
    File URL: https://libkey.io/10.1111/irel.12308?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:ilo:ilowps:470847 is not listed on IDEAS
    2. Keith Bender & Colin Green & John Heywood, 2012. "Piece rates and workplace injury: Does survey evidence support Adam Smith?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 569-590, January.
    3. Wolter H.J. Hassink & Pierre Koning, 2009. "Do Financial Bonuses Reduce Employee Absenteeism? Evidence from a Lottery," ILR Review, Cornell University, ILR School, vol. 62(3), pages 327-342, April.
    4. Boeri, Tito & Lucifora, Claudio & Murphy, Kevin J. (ed.), 2013. "Executive Remuneration and Employee Performance-Related Pay: A Transatlantic Perspective," OUP Catalogue, Oxford University Press, number 9780199669806, Decembrie.
    5. Barmby, Tim & Orme, Chris & Treble, John, 1995. "Worker absence histories: a panel data study," Labour Economics, Elsevier, vol. 2(1), pages 53-65, March.
    6. John Forth & Alex Bryson & Lucy Stokes, 2016. "Are firms paying more for performance?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 37(2), pages 323-343, May.
    7. Golden, Lonnie., 2012. "The effects of working time on productivity and firm performance : a research synthesis paper," ILO Working Papers 994708473402676, International Labour Organization.
    8. Bernd J. Frick & Ute Goetzen & Robert Simmons, 2013. "The Hidden Costs of High-Performance Work Practices: Evidence from a Large German Steel Company," ILR Review, Cornell University, ILR School, vol. 66(1), pages 198-224, January.
    9. John Pencavel, 2015. "The Productivity of Working Hours," Economic Journal, Royal Economic Society, vol. 125(589), pages 2052-2076, December.
    10. Jed DeVaro & John S. Heywood, 2017. "Performance Pay and Work-Related Health Problems," ILR Review, Cornell University, ILR School, vol. 70(3), pages 670-703, May.
    11. Bruce Shearer, 2004. "Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 513-534.
    12. John Pencavel, 2016. "Recovery from Work and the Productivity of Working Hours," Economica, London School of Economics and Political Science, vol. 83(332), pages 545-563, October.
    13. Pencavel, John, 2016. "Recovery from Work and the Productivity of Working Hours," IZA Discussion Papers 10103, Institute of Labor Economics (IZA).
    14. Sarah Brown & Fathi Fakhfakh & John G. Sessions, 1999. "Absenteeism and Employee Sharing: An Empirical Analysis Based on French Panel Data, 1981–1991," ILR Review, Cornell University, ILR School, vol. 52(2), pages 234-251, January.
    15. Ruo SHANGGUAN & Jed DEVARO & OWAN Hideo, 2021. "Enhancing Team Productivity through Shorter Working Hours: Evidence from the Great Recession," Discussion papers 21040, Research Institute of Economy, Trade and Industry (RIETI).
    16. Dickinson, David L, 1999. "An Experimental Examination of Labor Supply and Work Intensities," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 638-670, October.
    17. Treble,John & Barmby,Tim, 2011. "Worker Absenteeism and Sick Pay," Cambridge Books, Cambridge University Press, number 9780521806954.
    18. Chung-cheng Lin, 2003. "A backward-bending labor supply curve without an income effect," Oxford Economic Papers, Oxford University Press, vol. 55(2), pages 336-343, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gürtler, Oliver & Struth, Lennart & Thon, Max, 2023. "Competition and risk-taking," European Economic Review, Elsevier, vol. 160(C).
    2. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2023. "Does Performance Pay Increase the Risk of Marital Instability?," Research Papers in Economics 2023-06, University of Trier, Department of Economics.
    3. Green, Colin P. & Heywood, John S., 2023. "Performance pay, work hours and employee health in the UK," Labour Economics, Elsevier, vol. 84(C).
    4. Yela Aránega, Alba & Gonzalo Montesinos, Clara & del Val Núñez, María Teresa, 2023. "Towards an entrepreneurial leadership based on kindness in a digital age," Journal of Business Research, Elsevier, vol. 159(C).
    5. Green, Colin P. & Heywood, John S., 2022. "Does Performance Pay Influence Hours of Work?," IZA Discussion Papers 15474, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alex Bryson & Harald Dale-Olsen, 2017. "Does Sick Pay Affect Workplace Absence?," DoQSS Working Papers 17-12, Quantitative Social Science - UCL Social Research Institute, University College London.
    2. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2022. "Performance pay and alcohol use in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 353-383, October.
    3. Benjamin Artz & Colin P. Green & John S. Heywood, 2021. "Does performance pay increase alcohol and drug use?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 969-1002, July.
    4. Baktash, Mehrzad B. & Heywood, John S. & Jirjahn, Uwe, 2022. "Worker stress and performance pay: German survey evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 201(C), pages 276-291.
    5. Bryson, Alex & Clark, Andrew E. & Freeman, Richard B. & Green, Colin P., 2016. "Share capitalism and worker wellbeing," Labour Economics, Elsevier, vol. 42(C), pages 151-158.
    6. Collewet, Marion & Sauermann, Jan, 2017. "Working hours and productivity," Labour Economics, Elsevier, vol. 47(C), pages 96-106.
    7. Konstantinos Pouliakas & Nikolaos Theodoropoulos, 2012. "The Effect of Variable Pay Schemes on Workplace Absenteeism," Research in Labor Economics, in: Research in Labor Economics, pages 109-157, Emerald Group Publishing Limited.
    8. Fortin, Bernard & Jacquemet, Nicolas & Shearer, Bruce, 2010. "Labour Supply, Work Effort and Contract Choice: Theory and Evidence on Physicians," CLSSRN working papers clsrn_admin-2010-30, Vancouver School of Economics, revised 21 Oct 2010.
    9. DeVaro, Jed & Kim, Jin-Hyuk & Wagman, Liad & Wolff, Ran, 2018. "Motivation and performance of user-contributors: Evidence from a CQA forum," Information Economics and Policy, Elsevier, vol. 42(C), pages 56-65.
    10. Della Giusta, Marina & Jewell, Sarah, 2018. "Working for nothing: personality, time allocation and earnings in the UK," MPRA Paper 91481, University Library of Munich, Germany.
    11. Argyro Avgoustaki & Hans T. W. Frankort, 2019. "Implications of Work Effort and Discretion for Employee Well-Being and Career-Related Outcomes: An Integrative Assessment," ILR Review, Cornell University, ILR School, vol. 72(3), pages 636-661, May.
    12. Corgnet, Brice & Hernán-González, Roberto & Rassenti, Stephen, 2015. "Firing threats: Incentive effects and impression management," Games and Economic Behavior, Elsevier, vol. 91(C), pages 97-113.
    13. Boal, William M., 2018. "Work intensity and worker safety in early twentieth-century coal mining," Explorations in Economic History, Elsevier, vol. 70(C), pages 132-149.
    14. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry Into The Theory, Causes And Consequences Of Monitoring Indicators Of Health And Safety At Work," SIRE Discussion Papers 2010-120, Scottish Institute for Research in Economics (SIRE).
    15. John Pencavel, 2016. "Recovery from Work and the Productivity of Working Hours," Economica, London School of Economics and Political Science, vol. 83(332), pages 545-563, October.
    16. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    17. Böckerman, Petri & Bryson, Alex & Ilmakunnas, Pekka, 2012. "Does high involvement management improve worker wellbeing?," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 660-680.
    18. Bryan, Mark & Bryson, Alex, 2016. "Has performance pay increased wage inequality in Britain?," Labour Economics, Elsevier, vol. 41(C), pages 149-161.
    19. Pencavel, John, 2016. "Recovery from Work and the Productivity of Working Hours," IZA Discussion Papers 10103, Institute of Labor Economics (IZA).
    20. Basil Dalamagas & Stelios Kotsios, 2012. "A macroeconomic approach to the income-tax work-effort relationship," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(3), pages 349-366, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:indres:v:61:y:2022:i:4:p:327-352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0019-8676 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.