The following details have been supplied by the TUC:

Incentive-related pay schemes can stress rather than motivate employees, according to new research. The study by academics from the universities of East Anglia and Sheffield explored the relationship between three types of ‘contingent pay’ – performance-related, profit-related, and employee share-ownership – and positive employee attitudes such as job satisfaction, employee commitment and trust in management.

Researchers found that only performance-related pay had a positive impact on all three employee attitudes.

However the results, published in Human Resource Management Journal, confirmed that performance-related pay is also associated with more intense working. The authors said this could mean employees are encouraged to work too hard and too much, leading to work-related stress or poor well-being, and offsetting some of its positive impact on staff. The study involved 1,293 managers and 13,657 employees at 1,293 workplaces in the UK.

Lead researcher Dr Chidiebere Ogbonnaya said: “Our study is the first to show empirical support for claims that the productivity gains of these pay schemes might be associated with employees’ experience of more intense working. Performance-related pay in particular is associated with the feeling that work might be too demanding or that there is insufficient time to get work done.” He added: “Even though employees may value these earnings as a ‘good thing’, the ultimate beneficiary of their extra effort is the organisation. As a consequence, performance-related pay may be considered exploitative, or a management strategy that increases both earnings and work intensification.”