Performance pay drives poor health amongst workers

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All workers increase their odds of ill health when their pay is based on their performance, say researchers at the University of Aberdeen

This negative effect cuts across men and women and the rich and poor, say the authors of the report: The Unintended Consequences of the Rat Race: The Detrimental Effects of Performance Pay on Health.

To form this report the researchers, Professor Keith A. Bender and Professor Ioannis Theodossiou, used 18 years’ worth of data from the British Household Panel Survey which has a lot of information on both health measures and whether earnings are based on performance.

To measure ill health the study focused on four health measures – overall health, heart health (e.g. heart attacks, hypertension), stomach health (e.g. ulcers), and mental health (e.g. anxiety and depression).

The results

It seems that women on performance-related pay (PRP) have slightly higher hazards for both heart health and anxiety/depression where males have higher hazards for stomach health.

“Non-manual workers are more susceptible to heart problems, while manual workers are more likely to have stomach and anxiety/depression problems,”
says Professor Keith A. Bender, University of Aberdeen.

Stress levels were also measured. Overall, the general conclusions mimic the other health results – namely, that an increase in the percentage of time spent in performance pay increases the hazard to report more stress (across all stress measures) or lower happiness.

The stress measures defined in this experiment includes difficulties with sleep, making decisions, feeling under strain, ability to overcome difficulties, loss of confidence and general happiness.

It’s clear from the result tables that the longer all workers stay in performance pay, the higher the odds to drop into poor health.

More information

To read the report in more detail, click here. The Understanding Society team continue to ask questions about performance pay.

To see the authors’ profiles, click below.

Related links

What’s the big deal with pay for performance?

this news has been re-posted from the Understanding Society website