What is it about?
Much of the literature on performance-related pay (PRP) and poor health relies on self-reported data, and the relationship is difficult to examine due to confounding variables. We examine the relationship between PRP and three groups of health measures using data from the UKHLS: blood pressure, inflammation markers in blood, and self-reported health. Regressions correcting for self-selection bias and socio-demographic covariates find that PRP contracts are associated with poorer mental health, higher systolic blood pressure, and higher levels of fibrinogen. These findings suggest that firms that use PRP may need to implement policies to mitigate against PRP-related stress.
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Why is it important?
More than 30 million work days are lost from work related illness in the UK (HSE, 2022). Given that 15-20% of the UK workforce is paid by performance, a key element of these lost workdays may be through performance pay.
Perspectives
This is one of the first papers to examine performance pay's effect on objective health measures such as blood pressure and stress inflamation markers in the blood.
Professor Keith A Bender
University of Aberdeen
Read the Original
This page is a summary of: Performance‐related pay, mental and physiological health, Industrial Relations A Journal of Economy and Society, May 2023, Wiley,
DOI: 10.1111/irel.12334.
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