DP5455 Performance Related Pay and Labour Productivity

Author(s): Anne Gielen, Marcel J M Kerkhofs, Jan C. van Ours
Publication Date: January 2006
Keyword(s): labour productivity, performance related pay
JEL(s): C41, H55, J64, J65
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=5455

This paper uses information from a panel of Dutch firms to investigate the labour productivity effects of performance related pay (PRP). We find that PRP increases labour productivity at the firm level with about 9%.