Does contingent pay encourage positive employee attitudes and intensify work?

This paper explores the relationships between three dimensions of contingent pay – performance-related pay, profit-related pay and employee share-ownership – and positive employee attitudes (job satisfaction, employee commitment, and trust in management). The paper also examines a conflicting argument that contingent pay may intensify work and this can detract from its positive impact on employee attitudes. Of the three contingent pay dimensions, only performance-related pay had direct positive relationships with all three employee attitudes. Profit-related pay and employee share-ownership had a mix of negative and no significant direct relationships with employee attitudes, but profit-related pay showed U-shaped curvilinear relationships with all three employee attitudes. The results also indicated that performance-related pay is associated with work intensification, and this offsetssome of its positive impact on employee attitudes.