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  • A Field Study of The Impact of A Performance-Based Incentive Plan

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    Deepika Malviya
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    This document summarizes two academic papers on the impact of performance-based incentive plans. The first paper reports on a field study that found implementing a performance-based compensation plan for retail employees led to increased sales over time. However, sales gains were lower during peak seasons when more temporary workers were employed. The second paper examines the impact of individual and gain-sharing incentives on job satisfaction of British employees. It found no significant difference in overall job satisfaction between employees receiving performance-related pay and other compensation methods. Gain-sharing incentives were found to have a consistently positive effect on employee well-being.

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    This document summarizes two academic papers on the impact of performance-based incentive plans. The first paper reports on a field study that found implementing a performance-based compensation plan for retail employees led to increased sales over time. However, sales gains were lower during peak seasons when more temporary workers were employed. The second paper examines the impact of individual and gain-sharing incentives on job satisfaction of British employees. It found no significant difference in overall job satisfaction between employees receiving performance-related pay and other compensation methods. Gain-sharing incentives were found to have a consistently positive effect on employee well-being.

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    7 views2 pages

    A Field Study of The Impact of A Performance-Based Incentive Plan

    Uploaded by

    Deepika Malviya
    This document summarizes two academic papers on the impact of performance-based incentive plans. The first paper reports on a field study that found implementing a performance-based compensation plan for retail employees led to increased sales over time. However, sales gains were lower during peak seasons when more temporary workers were employed. The second paper examines the impact of individual and gain-sharing incentives on job satisfaction of British employees. It found no significant difference in overall job satisfaction between employees receiving performance-related pay and other compensation methods. Gain-sharing incentives were found to have a consistently positive effect on employee well-being.

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    Download as DOC, PDF, TXT or read online from Scribd
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    A Field Study of the Impact of a Performance-Based Incentive Plan

    Rajiv D. Banker
    Temple University

    Seok-Young Lee
    Sungshin Women's University

    Gordon Potter
    Cornell University

    Abstract: Much management accounting research focuses on design of incentive compensation contra cts. A basic assumption in these contracts is that performance-based incentives improve em ployee performance. This paper reports on a field test of the multi-period incentive effects of a performance-based compensation plan on the sales of a retail establishment. Analysis of p anel data for 34 retail outlets over 66 months indicates a sales increase when the plan is im plemented an effect that persists over time. Sales gains however are significantly lower in th e peak selling season when more temporary workers are employed.

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    Confronting Objections to Performance Pay: A Study of the Impact of In dividual and Gain-Sharing Incentives on the Job Satisfaction of British E mployees

    Kostas Pouliakas
    University of Aberdeen - Business School

    Ioannis Theodossiou
    University of Aberdeen - Business School February 2007 University of Aberdeen Business School Working Paper No. 2007-08 Abstract: The increasing interest in incentive pay schemes in recent years has raised concerns regardi ng their potential damaging effecton 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 (1998-2 003) of the British Household Panel Survey (BHPS), and after correcting for the sorting probl em that arises, no significant difference in overall job utility is found between those receivin g 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 s upported, as are popular concerns regarding the adverse impact of PRP schemes on job secu rity. 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 effecton employee well-being.

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