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In this paper, we review the literature on pay variation (e.g., pay dispersion, pay compression, pay range) in organizations. Pay variation research has increased markedly in the past two decades and much progress has been made in terms of understanding its consequences for individual, team, and organizational outcomes. Our review of this research exposes several levels-related assumptions that have limited theoretical and empirical progress. We isolate the issues that deserve attention, develop an illustrative multilevel model, and offer a number of testable propositions to guide future research on pay structures.

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.

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

This paper investigates the relationships between performance-related pay and WE. Two studies were used to investigate these relationships, finding that performance-related pay links directly to WE. Indirectly, performance-related pay links to pay satisfaction, which in turn links to WE. Also, performance-related pay links to pay level which in turn links to pay satisfaction, which in turn links to WE. The links between performance-related pay and WE are weak, showing that, performance-related pay is not sufficient alone; there must be satisfaction with pay level and adequate reward for performance.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The diffusion of performance related pay has attracted considerable academic attention over the past decade. While much contemporary debate has focussed on the excesses of executive remuneration at the “big end of town”, what is not so prominent are the views of unions representing employees at the other end of the remuneration spectrum: this is the purpose of this paper.

Evidence was gathered at two levels using two sets of research instruments: in‐depth interviews with senior union officials, and primary documentation analysis with specific reference to performance appraisal and performance‐related pay clauses in union Enterprise Bargaining Agreements.

Document analysis reveals that performance appraisal and performance‐related pay clauses range from mere stipulation of existence to detailed processes and principles of design and implementation. Specific clauses in the white‐collar unions’ agreements suggest that they are not totally opposed. However, the lack of performance appraisal and performance‐related pay clauses in the blue‐collar unions’ agreements illustrate their propensity to restrict pay increases to a job classification structure. Although there were clauses that aimed to ensure a performance‐oriented culture, their agreements seem to be mere sentiments. Overall, only one union supports the notion of performance related pay; the others find performance appraisals difficult to embrace. Negative experiences and consequent problems lead them to argue that the process is complicated and usually puts workers at a disadvantage.

Strands of different explanations account for union opposition, but the principal issue is that performance appraisal has only an evaluative function, that is to link performance to pay. To minimise problems in shaping PRP schemes, the unions advocated the integration of a social dimension; transparency and equality.

Research on the relationship between pay for individual performance (PFIP) and work engagement (WE) is limited. The purpose of this paper is to present a model outlining a threefold association between PFIP and WE: a direct association, an indirect association via pay satisfaction and a joint indirect association via pay level and pay satisfaction.

Structural equation modeling and bootstrapping procedures were used to test hypotheses with regard to these associations based on data obtained from two independent studies: the author’s own research project, and the European Work Conditions Survey 2015.

In both studies, the author found the hypothesized direct association between PFIP and WE; indirect association between PFIP and WE via pay satisfaction; and a joint indirect association between PFIP and WE via pay level and pay satisfaction.

Given its limited cross-sectional design, future longitudinal research in this area is needed to test the model of relations presented in this paper.

The association between PFIP and WE is weak, and partially mediated by pay satisfaction; thus, it seems that to promote WE, it is not solely sufficient to introduce PFIP into remuneration systems, but that, in addition, PFIP should be aligned with employee pay expectations.

This study contributes to the career development literature by proposing and initially testing a model describing the three ways PFIP may be related to WE, one of the most crucial factors in achieving career success.

To evaluate a proposed prescriptive model for the design of effective combinations of performance goals and pay‐for‐performance plans for the performance management of teams.

The idea underlying the model – in which task, goal, and reward interdependence and their fit play a dominant role – is that a pay‐for‐performance plan should support the team goals and the goals of individual team members as well as support the way in which team members need to cooperate. To obtain a first notion on the model's validity, it was applied to evaluate a pay‐for‐performance plan for management teams at a large IT company. This evaluation consisted of an in‐depth study of three management teams, using a case study methodology.

Combinations of fit among type of team, performance goals, and pay‐for‐performance plan (established by a fit between the interdependence constructs and/or by an overlap in the content of the goal and pay indicators) are more effective than combinations of misfit.

The case study was limited to intra‐team interdependence relationships and did allow for a analysis of the separate effects of a fit between the interdependence constructs versus content fit.

This study shows that pay‐for‐performance plans should not be designed in isolation, but rather in alignment with performance goals and existing task interdependencies.

This is the first study to investigate the three inter‐dependence constructs in conjunction in a field setting.

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.

Looks at the 2000 Employment Research Unit Annual Conference held at the University of Cardiff in Wales on 6/7 September 2000. Spotlights the 76 or so presentations within and shows that these are in many, differing, areas across management research from: retail finance; precarious jobs and decisions; methodological lessons from feminism; call centre experience and disability discrimination. These and all points east and west are covered and laid out in a simple, abstract style, including, where applicable, references, endnotes and bibliography in an easy‐to‐follow manner. Summarizes each paper and also gives conclusions where needed, in a comfortable modern format.

Asks whether performance‐related pay can be compatible with TQM and examines the opinions of leading “gurus” on the subject. Looks at examples of good practice in performance management in the United Kingdom and at the practical issues involved for an organization using TQM. Indicates how remuneration can be linked to several aspects of performance, both individual and in groups. Contends that if an organization is willing to invest money in a quality programme then it seems sensible to “link pay to the practices and process associated with organizational success”.