EconPapers    
Economics at your fingertips  
 

The Performance Pay Premium: How Big Is It and Does It Affect Wage Dispersion?

Alex Bryson (), John Forth and Lucy Stokes

No 433, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research

Abstract: Using nationally representative linked employer-employee data we find one-quarter of employees in Britain are paid for performance. The log hourly wage gap between performance pay and fixed pay employees is .36 points. This falls to .15 log points after controlling for observable demographic, job and workplace characteristics. It falls still further to .10 log points when comparing "like" employees in the same workplace, indicating that performance pay contracts are used in higher paying workplaces. The premium rises markedly as one moves up the wage distribution: it is seven times higher at the 90th percentile than it is at the 10th percentile in the wage distribution (.42 log points compared to .06 log points).

Keywords: wages; wage inequality; performance pay; bonuses (search for similar items in EconPapers)
JEL-codes: J33 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.niesr.ac.uk/sites/default/files/publica ... on%20Paper%20433.pdf

Related works:
Working Paper: The Performance Pay Premium: How Big Is It and Does It Affect Wage Dispersion? (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesrd:433

Access Statistics for this paper

More papers in National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London SW1P 3HE. Contact information at EDIRC.
Bibliographic data for series maintained by Library & Information Manager ().

 
Page updated 2021-04-19
Handle: RePEc:nsr:niesrd:433