The Diffusion of Pay for Performance across Occupations

Abstract

The authors analyze the differences in the incidence of pay-for-performance plans across occupations in a sample of Spanish manufacturing establishments. Results show that significant differences occur across occupations in the incidence of individual, group, and firm- or plant-level pay for performance plans. They also examine the roles of establishment size, multinational ownership, and the human resource department in the incidence of pay-for-performance plans and their variability across occupations within the same firm. These factors are correlated with a greater use of pay for performance and, in most cases, this effect is similar across occupations.