Title

Payment by results systems : British evidence

Document Type

Journal article

Source Publication

British Journal of Industrial Relations

Publication Date

3-1-1997

Volume

35

Issue

1

First Page

1

Last Page

22

Abstract

A model of the firm's decision to adopt a payment by results system is developed and tested with British establishment data. The model maintains that payment by results systems have larger set-up costs but lower supervision costs than time rates, particularly for short-tenure workers who are not well motivated by deferred compensation. The evidence confirms the model's predictions by showing that payment by results systems substitute for supervision, and that larger establishments and those with shorter-tenure workers are more likely to adopt payment by results. In addition, both the presence of a payment by results system and the new adoption of such a system are shown to exert a positive influence on measures of establishment performance.

DOI

10.1111/1467-8543.00038

Print ISSN

00071080

E-ISSN

14678543

Publisher Statement

Copyright © Blackwell Publishers Ltd/London School of Economics 1997

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Full-text Version

Publisher’s Version

Recommended Citation

Heywood, J. S., Siebert, W. S., & Wei, X. (1997). Payment by results systems: British evidence. British Journal of Industrial Relations, 35(1), 1-22. doi: 10.1111/1467-8543.00038