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The decline of incentive pay in British manufacturing
Author(s) -
Arrowsmith James,
Marginson Paul
Publication year - 2010
Publication title -
industrial relations journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.525
H-Index - 3
eISSN - 1468-2338
pISSN - 0019-8692
DOI - 10.1111/j.1468-2338.2010.00570.x
Subject(s) - incentive , flexibility (engineering) , context (archaeology) , competition (biology) , work (physics) , payment , business , performance related pay , control (management) , focus (optics) , industrial organization , management control system , economics , marketing , public economics , microeconomics , management , finance , engineering , mechanical engineering , paleontology , ecology , physics , optics , biology
Motivation theories and the strategic pay literature envisage that the management of employees can be well‐served by financial incentives and other forms of pay flexibility. Traditionally, UK manufacturing has made extensive use of variable payments systems (VPS), notably piece‐work and bonuses, but these have declined at the same time as managerial control over pay‐setting has increased. Evidence from six case studies suggests that a focus on pay is only part of the picture. Increased competition and change makes the design of VPS more complex, and new forms of work organisation become the focus of performance. In this context, firms have (i) abandoned individual incentive pay and (ii) aggregated VPS in support of broader objectives.