March 2010

IZA DP No. 4839: The Diffusion of Pay for Performance across Occupations

published in: Industrial & Labor Relations Review, 2013, 66 (5), 1115-1148

In this paper the differences in the incidence of pay for performance plans between occupations in a sample of Spanish manufacturing establishments are analyzed. Our results show that there are significant differences between occupations in the incidence of individual, group and firm or plant pay for performance plans. The roles of establishment size, multinational ownership and the human resources management department in the incidence of pay for performance plans and their variability of use across occupations within the same firm are also studied. These factors are found to correlate to a greater use of pay for performance and, in most cases, this effect is homogenous across occupations.


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