Arbeitspapier

Pay enough, don't pay too much or don't pay at all? The impact of bonus intensity on job satisfaction

Using ten waves (1998-2007) of the British Household Panel Survey (BHPS), this paper investigates the ceteris paribus association between the intensity of incentive pay, the dynamic change in bonus status and the utility derived from work. After controlling for individual heterogeneity biases, it is shown that job utility rises only in response to 'generous' bonus payments, primarily in skilled, non-unionized, private sector jobs. Revoking a bonus from one year to the next is found to have a detrimental impact on employee utility, while job satisfaction tends to diminish over time as employees potentially adapt to bonuses. The findings are therefore consistent with previous experimental evidence, suggesting that employers wishing to motivate their staff should indeed pay enough or don't pay at all.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 4713

Classification
Wirtschaft
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Safety; Job Satisfaction; Related Public Policy
Compensation Packages; Payment Methods
Personnel Economics: Compensation and Compensation Methods and Their Effects
Personnel Economics: Labor Management
Subject
Incentives
intensity
bonus
performance pay
job satisfaction
Leistungsorientierte Vergütung
Erfolgsbeteiligung
Arbeitszufriedenheit
Großbritannien

Event
Geistige Schöpfung
(who)
Pouliakas, Konstantinos
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2010

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Pouliakas, Konstantinos
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2010

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