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The article aims to provide an insight into the perspectives and possibilities of implementing the performance‐related pay in the Estonian general educational schools. It also aims to test two propositions regarding factors that influence school performance and teachers' and school managers' opinions about performance management.

A total of 298 school managers and 2,165 teachers from general educational schools in Estonia participated in the study. The factor, regression and correlation analysis, independent samples t‐test and one‐way ANOVA analysis were used to study claims related to school management and performance and educational processes.

The results of the analysis show that besides teachers' activities and effectiveness factors, various school management factors play an important role in the shaping of the school performance and the opinions towards the implementation of performance appraisal and performance‐related pay.

The main limitation to the research is that it is difficult to measure the schools' outcome. Second, the study was mainly quantitative, with only a few open questions and thus, the respondents were neither able to give full answers nor provide explanations. Therefore, further case studies are needed to obtain a more precise overview.

Although performance‐related pay is seen as an important management tool for increasing schools' outcome, there is no clear overview as to how the school managers and teachers in Estonia look at the issue and which factors should be considered in implementing performance‐related pay.

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.

The study first presents a theoretical framework that motivates n empirical study of performance‐related pay. The data are based on Norwegian establishment surveys from 1997 and 2003. The empirical analysis addresses determinants of adoption of performance pay systems.

Performance‐related pay is more prevalent in firms where workers of the main occupation have a high degree of autonomy in how to organise their work. Performance pay is also more widespread in large firms, but is less common in highly unionised firms and in firms where wages are determined through centralised bargaining. Results show that performance pay is on the rise in Norway, even after accounting for changes in industry structure, bargaining regime, and union density. Finally, it is found that the incidence of performance‐related pay relates positively to product‐market competition and foreign ownership.

The paper provides new empirical evidence on the use of performance‐related pay. The results support an interpretation of incentive pay as motivated by agency problems, and provide new evidence on the relationship between payment schemes and institutions such as unions and bargaining framework.

Examines the impending introduction of performance‐related pay to academic staff in higher education. Draws on research in both public and private sectors both in the UK and USA to suggest that there are nine lessons that those with the responsibility for introducing and operating performance‐related pay in higher education may heed. The lessons are that performance‐related pay: may not motivate academic staff; may demotivate academic staff; may alienate academic staff; objective PRP assessment of academic staff is problematic; may lead to other benefits of appraisal being dissipated; is likely to be driven by budget considerations; gives differential achievement opportunities to staff; threatens collegiality and finally affronts professionalism. Concludes that performance‐related pay is unlikely to be successful in causing academic staff to work more effectively; its impact may at best be neutral and at worst harmful.

The aim of this study was to investigate whether perceptions of fair pay are characterised by social norms about the appropriate bases of pay differentials.

In order that the employees could voice their opinions without the restrictions of pre‐coded categories individual interviews were carried out with employees from five private sector organizations. The design of the study allowed an examination of attitudes towards pay criteria in the context of changes in organizational pay structures towards more individualism in pay awards.

The most popular bases of pay were “responsibility”, “qualifications” and “performance”. The attitudes appeared to reflect widespread norms about the most appropriate bases of pay. There was some evidence for an interaction between employee attitudes towards pay determination and organizational characteristics on the design and implementation of pay policies.

The interview methodology restricted the size of the sample and consequently the generalisations that can be made from the findings. Future research could use qualitative or quantitative methods to check whether the findings replicate with different types of groups of employees.

The paper contains useful information for human resource practitioners about maintaining “felt fairness” in the design of new pay systems.

The qualitative approach of this study produces rich information about employee perceptions of pay differentials in the context of current changes towards more individualised pay determination.

In large firms the managers who run the business tend not to be large shareholders. In addition, managers are said to have objectives which differ from those of the owners. Aligning these conflicting interests is the basis of the agency problem. Various corporate governance schemes have been introduced to ensure that managers follow profit‐driven policies. Looks at the separation of decision management from decision control, the frequency of meetings between divisional managers and their superiors, performance‐related pay and performance‐related incentives. Examines their impact on firm profitability. Finds that the level of monitoring of divisional managers and the use of divisional performance‐related pay has a significant effect on performance. Finds incentives in general do not affect performance. Finds on average that performance is unaffected by the separation of decision processes, although it does help to achieve very good profitability.

Decentralisation of pay bargaining in the UK is well known. Other countries in Europe have not gone so far but a clear trend towards decentralisation is perceptible, although national or industry‐wide bargaining is still widely used. There is an accompanying increase in the devolvement of responsibility for pay issues from personnel specialists to line management. These trends have been accompanied by a steady rise in variable pay across Europe. Proportionate growth varies between the public and private sectors.

Decentralization of pay bargaining in the UK is well known. Other countries in Europe have not gone so far but a clear trend towards decentralization is perceptible, although national or industry‐wide bargaining is still widely used. There is an accompanying increase in the devolvement of responsibility for pay issues from personnel specialists to line management. These trends have been accompanied by a steady rise in variable pay across Europe. Proportionate growth varies between the public and private sectors.

The ability to measure and assess “quality” is essential in building and maintaining a safe and effective transportation system. Attaining acceptable quality outcomes in transportation projects has been a reoccurring problem at both the federal and state levels, at least partially, as a result of poorly developed, inefficient or nonexistent quality assurance/quality control (QA/QC) processes. The purpose of this paper is to develop and implement a new QA/QC process that focuses on a novel double-bounded performance-related specification (PRS) and corresponding pay factor policy that includes both lower and upper quality acceptance and payment reward boundaries for bridge concrete.

The authors use historical data to design different payment scenarios illustrating likely industry responses to the new PRS, and select the single scenario that best balances risk between the agency and industry. The authors then convert that payment scenario to a pay factor schedule using a search heuristic and determine statistical compliance with the PRS using percent-within-limits (PWL).

The methodology offers an innovative approach for developing an initial set of pay factors when lifecycle cost data are lacking and the PRS are new or modified. An important finding is that, with a double-bounded PRS, it is not possible to represent pay factors using the simplified table PWL currently employed in practice because each PWL value occupies two separate positions in the payment structure – one above the design target and one below it. Therefore, a more detailed set of pay factors must be employed which explicitly specify the mean sample value and the design target. The approach is demonstrated in practice for the Agency of Transportation in state of Vermont.

The authors demonstrate a novel approach for developing a double-bounded PRS and introduce a payment incentive/disincentive policy with the goal of improving total product quality. The new pay factor policy includes both a payment penalty below the contracted price for failing to meet a specified performance criterion as well as a payment premium above the contracted price that increases as the sample product specification approaches an “ideal” design value. The PRS includes both an upper and lower acceptance boundary for the finished product as opposed to only a lower tail acceptance boundary, which is the traditional approach.

The authors illustrate a research collaboration between academia and a state agency that highlights the role academic research can play in advancing quality management practices. The study involves the use of actual product performance data and is operational as opposed to conceptual in nature. Finally, the authors offer important practical insights and guidance by demonstrating how a new PRS and pay factor policy can be developed without the use of site-specific historical lifecycle cost (LCC) data that include detailed manufacturing, producing and placement cost data, as data related to product performance over time. This is an important contribution, as the development and implementation of pay factor policies typically involve the use of historical LCC data. However, in many cases, these data are not available or may be incomplete.

With the new PRS and pay factor schedule, the Agency expects shrinkage and cracking on bridge decks to decrease along with overall maintenance and rehabilitation costs. A major focus the new PRS is to actively involve industry partners in quality improvement efforts.

The authors focus on a major modification to an existing QA/QC process that involves the development of a new PRS and an associated pay factor policy undertaken by the Vermont Agency of Transportation. The authors use empirical data to develop a novel double bounded PRS and payment schedule for concrete and offer unique operational/practical insight and guidance by demonstrating how a new PRS and pay factor policy can be developed without the use of site-specific historical LCC. Typically, PRS for in-place concrete have only a lower tail acceptance boundary.