New Study: High-Performance Work Practices Can Have Negative Outcomes If Not Linked to Broad Incentive Pay

A new study in the UK shows that high-performance work practices can positively affect employee commitment, engagement, turnover intention, and job satisfaction, but only if multiple practices are used together, including broad-based incentive pay. Where only some practices are included, the results can be greater job stress and lower commitment.

The study, "Integrated and Isolated Impact of High Performance Work Practices on Employee Health and Well-Being: A Comparative Study," looks at a wide range of management practices, including team-based work, performance-related pay, selective hiring, grievance systems, job autonomy, staff training, flexible working, participative decision-making, information sharing, and supportive management. For performance-related pay to be included in the high-performance definition, it had to be paid to 40% or more of the staff. The study looked at both a large survey of National Health Service Employees and the 2004 Workplace Employment Relations Survey (WERS), a massive 2004 study of companies and employees covering 2,295 workplaces. Only the latter study looked at performance pay.

The top cluster of companies in the WERS study had high scores on broad incentives, team working, job autonomy, flexible work, and participative management. These companies saw very positive outcomes in terms of employee health and well-being. The results were mixed to negative in the next two clusters. While employee ownership was not part of this study, it confirms what other research has shown, namely that asking employees to get more involved in helping companies perform well, but not giving them a stake in the outcome, can appear manipulative to them.