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Performance pay, working hours, and health‐related absenteeism

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  • 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
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    References listed on IDEAS

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    Cited by:

    1. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2025. "Performance Pay and Happiness: Work vs. Home?," Research Papers in Economics 2025-08, University of Trier, Department of Economics.
    2. Clemens, Marco & Sauermann, Jan, 2025. "Making the right call: The heterogeneous effects of individual performance pay on productivity," Labour Economics, Elsevier, vol. 94(C).
    3. 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.
    4. DeVaro, Jed, 2024. "Work Schedules," IZA Discussion Papers 17061, IZA Network @ LISER.
    5. Jirjahn, Uwe & Rienzo, Cinzia, 2025. "Working from Home and Mental Health: Giving Employees a Choice Does Make a Difference," IZA Discussion Papers 18187, IZA Network @ LISER.
    6. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2025. "Variable pay and work hours: does performance pay reduce the gender time gap?," Economica, London School of Economics and Political Science, vol. 92(368), pages 1149-1167, October.
    7. 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).
    8. Christian Grund & Anna Nießen, 2025. "Performance Appraisals, Works Councils and Employees’ Presenteeism Behaviour," British Journal of Industrial Relations, London School of Economics, vol. 63(4), pages 718-745, December.
    9. Green, Colin P. & Heywood, John S., 2023. "Performance pay, work hours and employee health in the UK," Labour Economics, Elsevier, vol. 84(C).
    10. DeVaro, Jed, 2025. "Work schedules," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    11. Gürtler, Oliver & Struth, Lennart & Thon, Max, 2023. "Competition and risk-taking," European Economic Review, Elsevier, vol. 160(C).
    12. Green, Colin P. & Heywood, John S., 2022. "Does Performance Pay Influence Hours of Work?," IZA Discussion Papers 15474, IZA Network @ LISER.

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