TY  - RPRT
        AU  - Artz, Benjamin
AU  - Heywood, John S.
        TI  - Does Performance Pay Deter Job Quits?
        PY  - 2025/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17791
        UR  - https://www.iza.org/publications/dp17791
        AB  - We use US longitudinal survey data to examine the role of performance pay (other than profit sharing) in worker quit decisions. We argue that performance pay should increasingly be viewed as an indicator of an internal labor market rather than of a simple contemporaneous incentive. Suggestive of this claim, we find that in ever more complete specifications that account for worker and employer characteristics, aggregate earnings and worker job satisfaction, performance pay is associated with a reduced probability of worker quits. This remains when including worker fixed effects that control for unmeasured invariant heterogeneity. We investigate how it varies with the type of performance pay and its intensity. We confirm heterogeneity in this influence by workplace size.
        KW  - performance pay
KW  - internal labor markets
KW  - voluntary quits
        ER  -