Performance Pay and Job Satisfaction
- 1 September 2006
- journal article
- research article
- Published by SAGE Publications in Journal of Industrial Relations
- Vol. 48 (4), 523-540
- https://doi.org/10.1177/0022185606066143
Abstract
This article estimates the direct effect of performance pay schemes on job satisfaction for a representative sample of US workers. Both individual performance pay and profit sharing are routinely associated with higher satisfaction even as the level of pay and a long list of other determinants are held constant. This result holds in panel estimates designed to control for fixed effects. When individual performance pay is disaggregated into five specific schemes, all but one associate with higher satisfaction and piece rates associate with lower satisfaction. The role of gender is explored as an explanation for the results.Keywords
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