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".job satisfaction, performance pay, bonus, intensity, incentives

An Inquiry into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety at Work

This paper engages in an interdisciplinary survey of the current state of knowledge related to the theory, determinants and consequences of occupational safety and health (OSH). First, it synthesizes the available theoretical frameworks used by economists and psychologists to understand the issues related to the optimal provision of OSH in the labour market. Second, it reviews the academic literature investigating the correlates of a comprehensive set of OSH indicators, which portray the state of OSH infrastructure (social security expenditure, prevention, regulations), inputs (chemical and physical agents, ergonomics, working time, violence) and outcomes (injuries, illnesses, absenteeism, job satisfaction) within workplaces. Third, it explores the implications of the lack of OSH in terms of the economic and social costs that are entailed. Finally, the survey identifies areas of future research interests and suggests priorities for policy initiatives that can improve the health and safety of workers.health, safety, indicators, accidents, diseases, absenteeism

Educational segregation and the gender wage gap in Greece

Purpose To investigate the extent to which differences in the subject of degree studied by male and female university graduates contributes to the gender pay gap in Greece, an EU country with historically large gender discrepancies in earnings and occupational segregation. In addition, to explore the reasons underlying the distinct educational choices of men and women, with particular emphasis on the role of wage uncertainty. Design/methodology/approach Using micro-data from the Greek Labour Force Survey (LFS), Oaxaca-Blinder decompositions are employed to detect the extent to which gender differences in the type of degree studied can explain the male-female pay gap. ‘Risk-augmented earnings functions’ are also used to examine the differential wage premiums offered to men and women in Greece in response to the uncertainty associated with different fields of study. Findings It is found that the subjects in which women are relatively over-represented (e.g. Education, Humanities) are also those with the lowest wage returns. Gender differences in the type of degree studied can therefore explain an additional 8.4% of the male-female pay gap in Greece. A potential reason for distinct gender educational choices is that women opt for less uncertain educations that consequently command lower wage premiums in the job market. Practical Implications The findings suggest that the promotion of gender equality in Greece should pay closer attention to removing informal barriers to entry for women in educational fields traditionally chosen by men (e.g. more effective careers advice, work-experience placements, matching of young girls with professional ‘mentors’). Originality/value The study is the first to investigate the contribution of individual’s field of study to the gender wage gap in Greece. In addition, it includes the first-ever estimations of ‘risk-augmented earnings equations’ for that country

Socio-Economic Differences in the Perceived Quality of High and Low-paid Jobs in Greece

Bank of Greece and the 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

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

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

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

An inquiry into the theory, causes and consequences of monitoring indicators of health and safety at work

This paper engages in an interdisciplinary survey of the current state of knowledge related to the theory, determinants and consequences of occupational safety and health (OSH). First, it synthesizes the available theoretical frameworks used by economists and psychologists to understand the issues related to the optimal provision of OSH in the labour market. Second, it reviews the academic literature investigating the correlates of a comprehensive set of OSH indicators, which portray the state of OSH infrastructure (social security expenditure, prevention, regulations), inputs (chemical and physical agents, ergonomics, working time, violence) and outcomes (injuries, illnesses, absenteeism, job satisfaction) within workplaces. Third, it explores the implications of the lack of OSH in terms of the economic and social costs that are entailed. Finally, the survey identifies areas of future research interests and suggests priorities for policy initiatives that can improve the health and safety of workers

Wage Returns to University Disciplines in Greece: Are Greek Higher Education Degrees Trojan Horses?

This paper examines the wage returns to qualifications and academic disciplines in the Greek labour market. Exploring wage responsiveness across various degree subjects in Greece is interesting, as it is characterised by high levels of graduate unemployment, which vary considerably by field of study, and relatively low levels of wage flexibility. Using micro-data from recently available waves (2002-2003) of the Greek Labour Force Survey (LFS), the returns to academic disciplines are estimated by gender and public/private sector. Quantile regressions and cohort interactions are also used to capture the heterogeneity in wage returns across the various disciplines. The results show considerable variation in wage premiums across the fields of study, with lower returns for those that have a marginal role to play in an economy with a rising services/shrinking public sector. Educational reforms that pay closer attention to the future prospects of university disciplines are advocated.academic disciplines, wage returns, higher education, Greece

Rewarding Carrots & Crippling Sticks: Eliciting Employee Preferences for the Optimal Incentive Mix in Europe

A ranking of a variety of incentive devices used by firms according to their perceived effectiveness by employees is identified. The determinants of employee incentive preferences are also investigated, suggesting a ‘menu’ of conditions under which an organization’s personnel policies will have maximum motivational impact on its workforce. Based on the beliefs of a unique sample of workers from seven European countries, the results suggest that (a) the primary determinant of the level of employee effort is the amount of discretion offered at work; (b) pay incentives and ‘gift exchanges’ are the most important motivators; (c) the use of monitoring and Taylor-type assembly lines are the least effective incentives; and (d) the optimal design of incentive strategies by firms is strongly shaped by a host of contextual factors. The expressed desire for autonomy, and distaste for control, by employees gives credibility to the “participative” management approach.Incentives, effectiveness, effort, attitudes, employees

Measuring the Utility Cost of Temporary Employment Contracts before Adaptation: A Conjoint Analysis Approach

This study attempts to estimate the ‘utility cost’ of temporary employment contracts purged of the psychological effects of adaptation. A conjoint analysis experiment is used that examines the ex-ante contract preferences of a unique sample of low-skilled employees from 7 European countries. It is shown that permanent contract holders request a significant wage premium to move to a temporary job. In contrast, temporary workers are indifferent between permanent and temporary contracts, ceteris paribus. The evidence suggests that individuals have a psychological immune system which neutralises events that challenge their sense of well-being, such as job insecurity. The methodology developed in this paper can provide policymakers with an alternative and relatively inexpensive method of quantifying the transitional loss (or gain) in welfare that individuals might experience in response to changing labour market policies.Utility, Temporary contracts, Adaptation, Conjoint analysis