Employee Satisfaction in Agencies with Merit-Based Pay: Differential Effects for Three Measures

Now on SSRN, a new paper, written with Sungjoo Choi:

While many studies have examined the association between merit-based pay and organizational performance, few have assessed the psychological well-being of employees in agencies with such financial incentive schemes. We show that employees in agencies with merit-based pay are less satisfied with their organization than those in agencies that do not implement the incentive systems. We also show that this negative effect is larger in the case of organizational satisfaction than for pay satisfaction or employee satisfaction with the job itself.