Far from simply improving productivity and acting as an incentive for better working, performance-related pay may actually lead to greater employee happiness overall, according to the conclusions of a new study.
Research carried out by experts at Lancaster University Management School suggests that job satisfaction tends to be higher among those workers who have access to profit share and bonuses.
Factors in this include better satisfaction over working hours and an elevated sense of job security. In addition, research found that performance pay made male workers more satisfied with every aspect of their job whereas women were only more satisfied with their pay.
Report author Colin Green highlights the contradiction in performance pay having a positive affect on job security.
"Performance related pay would be expected to have a negative effect on job security, in so far as it is indicative of a culture of monitoring of work effort," he explained to HR Zone.
Directgov highlights that performance related pay schemes could benefit both worker and employer in terms of attracting and retaining talented staff.