Performance Related Pay Coverage in the UK

Marc Cowling

MPRA Paper from University Library of Munich, Germany

Abstract: A simple model of the firms’ decision to pay workers performance related pay (PRP) is tested using company level data for 1,001 UK private sector businesses. From the basic sample statistics we observe that, on average, 26.5% of workers are covered by PRP systems. Yet this hides the fact that only 50.5% of businesses have any workers at all covered by PRP. Our empirical analysis offers support for the key hypotheses drawn from Lazear type PRP models, which emphasise the relations between firm size and implementation costs, and ease of measurement, as medium and large firms are more likely to have PRP systems. However, these results are over-turned when we consider the extent of workers covered by firm level PRP systems if they are in place. Here we observe that more workers are covered by PRP in micro and small firms.

Keywords: performance related pay systems; firm size; quality of work (search for similar items in EconPapers)
JEL-codes: J31 J33 (search for similar items in EconPapers)
Date: 2007-01-30
New Economics Papers: this item is included in nep-bec and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/1619/1/MPRA_paper_1619.pdf original version (application/pdf)

Related works:
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:pra:mprapa:1619

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().