Cookies?
Library Header Image
LSE Research Online LSE Library Services

Renegotiating performance: the role of performance pay in renegotiating the effort bargain

Marsden, David (2003) Renegotiating performance: the role of performance pay in renegotiating the effort bargain. 578. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

[img]
Preview
PDF
Download (170Kb) | Preview

Abstract

Much of the academic and policy literature on performance related pay focuses on its role as an incentive system. Its role as means for renegotiating performance norms has been largely neglected. The introduction of performance related pay, based mostly on appraisals by line managers, in the British public services in the 1990s can be considered as a large-scale social experiment in the change from a seniority - to a performance-based payment system. When reviewing academic research and management inside information on the schemes, a recent government report concluded that they had failed to motivate staff and their operation had been divisive. Nevertheless, other information suggests that productivity rose. This article seeks to resolve the paradox by showing that performance pay was the instrument of a major renegotiation of productivity norms, and that this rather than motivation was the key story. It concludes that when analysing incentive systems, more attention needs to be given to contract theory, and in particular to the articulation of different levels of principal-agent relationships within organisations. The key to the rise in productivity in the British public services lay in how the appraisal activities by line managers were articulated with incentives and goal setting for the different levels of organisational performance in order to secure the passage to different performance norms.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2003 David Marsden
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Employment Relations and Organisational Behaviour Group
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 578
Date Deposited: 29 Feb 2008
URL: http://eprints.lse.ac.uk/3634/

Actions (login required)

Record administration - authorised staff only Record administration - authorised staff only

Downloads

Downloads per month over past year

View more statistics