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The Diffusion of Pay for Performance across Occupations

  • Bayo-Moriones, Alberto

    ()

    (University of Navarra)

  • Galdon-Sanchez, Jose Enrique

    ()

    (Universidad Pública de Navarra)

  • Martinez-de-Morentin, Sara

    ()

    (Universidad Pública de Navarra)

In this paper the differences in the incidence of pay for performance plans between occupations in a sample of Spanish manufacturing establishments are analyzed. Our results show that there are significant differences between occupations in the incidence of individual, group and firm or plant pay for performance plans. The roles of establishment size, multinational ownership and the human resources management department in the incidence of pay for performance plans and their variability of use across occupations within the same firm are also studied. These factors are found to correlate to a greater use of pay for performance and, in most cases, this effect is homogenous across occupations.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4839.

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Length: 29 pages
Date of creation: Mar 2010
Date of revision:
Publication status: published in: Industrial & Labor Relations Review, 2013, 66 (5), 1115-1148
Handle: RePEc:iza:izadps:dp4839
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  1. Erica L. Groshen, 1988. "Why do wages vary among employers?," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 19-38.
  2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  3. John T. Addison & Clive R. Belfield, 2008. "The Determinants of Performance Appraisal Systems: A Note (Do Brown and Heywood's Results for Australia Hold Up for Britain?)," British Journal of Industrial Relations, London School of Economics, vol. 46(3), pages 521-531, 09.
  4. Michelle Brown & John S. Heywood, 2005. "Performance Appraisal Systems: Determinants and Change," British Journal of Industrial Relations, London School of Economics, vol. 43(4), pages 659-679, December.
  5. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
  6. Baker, George & Gibbons, Robert & Murphy, Kevin J, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 1125-56, November.
  7. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  8. Nicolai J. Foss & Keld Laursen, 2002. "Performance Pay, Delegation, and Multitasking under Uncertainty and Innovativeness An Empirical Investigation," DRUID Working Papers 02-14, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  9. Randall S. Schuler & Susan E. Jackson, 2005. "A Quarter-Century Review of Human Resource Management in the U.S.: The Growth in Importance of the International Perspective," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 16(1), pages 11-35.
  10. Erica L. Groshen & Alan B. Krueger, 1990. "The structure of supervision and pay in hospitals," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(3), pages 134-146, February.
  11. Richard Belfield & Salima Benhamou & David Marsden, 2007. "Incentive Pay Systems and the Management of Human Resources in France and Great Britain," CEP Discussion Papers dp0796, Centre for Economic Performance, LSE.
  12. Erling Barth & Bernt Bratsberg & Torbjørn Hægeland & Oddbjørn Raaum, 2008. "Who pays for performance?," International Journal of Manpower, Emerald Group Publishing, vol. 29(1), pages 8-29, May.
  13. Robert W Drago & John S. Heywood, 1995. "The Choice of Payment Schemes: Australian Establishment Data," Working papers _006, University of Wisconsin - Milwaukee.
  14. Uwe Jirjahn & Gesine Stephan, 2004. "Gender, piece rates and wages: evidence from matched employer--employee data," Cambridge Journal of Economics, Oxford University Press, vol. 28(5), pages 683-704, September.
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