Anno 2024
Despite the growing interest in performance-related pay (PRP) schemes and their impact on employee performance and productivity, the hidden costs for employees—such as psychological, mental, and social side effects—remain underexplored, with existing evidence yielding mixed results. Grounded in contingency theory, this cross-country study examines the interplay between PRP and employee well-being, investigating how this relationship varies based on national cultural contingencies in which organizations operate.
The study analyzes data from over 10,000 employees working in private firms across Europe. The findings contribute fresh theoretical perspectives to the compensation debate, providing a foundation for a deeper understanding of the outcomes of various incentive plans across different cultural and organizational contexts.