Using a matched employer-employee data set for Norway, we exploit rare information on the union status of both individual employees and their workplaces. We establish two key results. First, we find a positive effect of workplace trade union density on the level of the individual's pay in...

Purpose – The purpose of this paper is to improve our understanding of why some firms tie compensation to worker performance as well as the variation in type of performance pay system across firms. Design/methodology/approach – The study first presents a theoretical framework that motivates...

Purpose – The purpose of this paper is to improve our understanding of why some firms tie compensation to worker performance as well as the variation in type of performance pay system across firms. Design/methodology/approach – The study first presents a theoretical framework that motivates...

This paper examines the impact of performance-related pay on wage differentials within firms. Our theoretical framework predicts that, compared to a fixed pay system, pay schemes based on individual output increase within-firm wage inequality, while group-based bonuses have minor effects on wage...