Performance-contingent pay raises productivity, yet in the German Socio-Economic Panel (SOEP) only about 16% of workers report receiving performance pay, with the incidence being roughly seven percentage points higher among university graduates than among non-graduates. This coexistence of low...

Using German survey data, we show conflicting influences of performance pay on overall life satisfaction. The overall influence reflects a strong positive influence through domains of life satisfaction associated with the job (job satisfaction, individual earnings satisfaction and household...

Using German survey data, we estimate the determinants of employee quits examining the roles of performance appraisal and performance pay. We show that employees subject to performance appraisals are less likely to quit. Yet, this influence depends upon the financial consequences that flow from...

Using German survey data, we show conflicting influences of performance pay on overall life satisfaction. The overall influence reflects a strong positive influence through domains of life satisfaction associated with the job (job satisfaction, individual earnings satisfaction and household...

Using German survey data, we show conflicting influences of performance pay on overall life satisfaction. The overall influence reflects a strong positive influence through domains of life satisfaction associated with the job (job satisfaction, individual earnings satisfaction and household...

For workers facing uncertain output, fixed-wage contracts provide implicit insurance compared to self-employment or performance-based pay. But like any insurance product, these contracts are prone to market distortions through moral hazard and adverse selection. Using a model of wage contracts...

Performance pay has been shown to have important implications for worker and firm productivity. Although workers' skills may directly matter for the cost of effort to reach performance goals, surprisingly little is know about the heterogeneity in the effects of incentive pay across workers. In...

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...