5 research outputs found

    Measuring adaptation to non-permanent employment contracts using a conjoint analysis approach

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    This study attempts to uncover the ‘real’ impact of temporary contracts on workers’ perceived job quality, prior to the psychological phenomena of adaptation, coping and cognitive dissonance coming into play. This is done by using a novel conjoint analysis approach that examines the ex ante preferences over different contract statuses of a newly generated sample of low-skilled employees from seven European countries. Other things equal, it is shown that the anticipated psychological ‘costs’ of moving from a riskless permanent contract to the insecurity of a temporary job or no work at all appear to be quite significant. In contrast, temporary employees, who have presumably already adapted to the circumstances surrounding a non-permanent contract, are found to be statistically indifferent between permanent and temporary employment, and request much smaller wage premiums in order to switch from one status to the other. The well-documented distress associated with joblessness is also confirmed in our data. The methodology developed here can provide policymakers with an alternative and relatively inexpensive method of quantifying the immediate impact of any shift in their employment policies.European Commissio

    Confronting objections to performance pay: A study of the impact of individual and gain-sharing incentives on the job satisfaction of British employees

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    The increasing interest in incentive pay schemes in recent years has raised concerns regarding their potential damaging effect on intrinsic job satisfaction, or the security of employment. This study explores the impact of both individual and gain-sharing incentives on the overall job satisfaction of workers in the UK, as well as their satisfaction with various facets of jobs, namely total pay, job security, and the actual work itself. Using data from six waves (1998-2003) of the British Household Panel Survey (BHPS), and after correcting for the sorting problem that arises, no significant difference in overall job utility is found between those receiving performance-related pay (PRP) and those on other methods of compensation. In addition, non-economic arguments that PRP crowds-out the intrinsic satisfaction of jobs are also not supported, as are popular concerns regarding the adverse impact of PRP schemes on job security. An important asymmetry in the manner in which individual and gain-sharing incentives affect the utility of employees is nonetheless unearthed, as the latter are consistently found to have a positive effect on employee well-being

    Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction

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    Using an econometric procedure that corrects for both self-selection of individuals into their preferred compensation scheme and wage endogeneity, this study investigates whether significant differences exist in the job satisfaction of individuals receiving performance-related pay (PRP) compared to those on alternative compensation plans. Using data from four waves of the British Household Panel Survey (BHPS), it is found that PRP exerts a positive effect on the mean job satisfaction of (very) high-paid workers only. A potential explanation for this pattern could be that for lower-paid employees PRP is perceived to be controlling, whereas higher-paid workers derive a utility benefit from what they regard as supportive reward schemes. Using PRP as an incentive device in the UK could therefore be counterproductive in the long run for certain low-paid occupations.European Commissio