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

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.Performance-related pay, job satisfaction, self-selection

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

Peer norm guesses and self-reported attitudes towards performance-related pay

Due to a variety of reasons, people see themselves differently from how they see others. This basic asymmetry has broad consequences. It leads people to judge themselves and their own behavior differently from how they judge others and others’ behavior. This research, first, studies the perceptions and attitudes of Greek Public Sector employees towards the introduction of Performance-Related Pay (PRP) systems trying to reveal whether there is a divergence between individual attitudes and guesses on peers’ attitudes. Secondly, it is investigated whether divergence between own self-reported and peer norm guesses could mediate the acceptance of the aforementioned implementation once job status has been controlled for. This study uses a unique questionnaire of 520 observations which was designed to address the questions outlined in the preceding lines. Our econometric results indicate that workers have heterogeneous attitudes and hold heterogeneous beliefs on others’ expectations regarding a successful implementation of PRP. Specifically, individual perceptions are less skeptical towards PRP than are beliefs on others’ attitudes. Additionally, we found that managers are significantly more optimistic than lower rank employees regarding the expected success of PRP systems in their jobs. However, they both expect their peers to be more negative than they themselves are

Multiple job-holding: Career pathway or dire straits?

Multiple job-holding, or “moonlighting”, is an important form of atypical employment in most economies. New forms of work, driven by digitalization, may enable its future growth. However, many misconceptions exist, including the belief that multiple job-holders are only low-skilled individuals who moonlight primarily for financial reasons, or that the practice increases during economic downturns. Recent literature highlights the significant links between moonlighting and job mobility. Multiple job-holding allows for the development of workers’ skills and spurs entrepreneurship

Are skill deficits always bad? Towards a learning perspective on skill mismatches

Abstract the explicit assumption in most literature on educational and skill mismatches is that these mismatches are inherently costly for workers. However, the results in the literature on the effects of underqualification or underskilling on wages and job satisfaction only partly support this hypothesis. Rather than assuming that both skill surpluses and skill deficits are inherently costly for workers, we interpret these mixed findings by taking a learning perspective on skill mismatches. Following the theory of vygotski on the so-called “zone of proximal development,” we expect that workers who start their job with a small skill deficit, show more skill growth than workers who start in a matching job or workers with a more severe skill deficit. We test this hypothesis using the cedefop european skills and jobs survey (esjs) and the results confirm these expectations. Workers learn more from job tasks that are more demanding than if they would work in a job that perfectly matches their initial skill level and this skill growth is largest for those who start with a small skill deficit. The learning opportunities are worst when workers start in a job for which they have a skill surplus. This is reflected in the type of learning activities that workers take up. Workers with a small skill deficit are more often engaged in informal learning activities. Finally, workers who started with a small skill deficit are no less satisfied with their job than workers who started in a well-matched job. We conclude that a skill match is good for workers, but a small skill deficit is even better. This puts some responsibility on employers to keep job tasks and responsibilities at a challenging level for their employees