job satisfaction; quits; wages; compensation methods; working conditions

Does How You are Paid Affect the Way You Feel?

We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. Those in receipt of group performance bonuses, profit shares, and those in share ownership schemes, have higher job satisfaction than other employees, having conditioned on wage levels. The size of the satisfaction effect depends on the size of the bonus payment. Those in receipt of incentive payments are also less likely to quit the firm. These findings hold having accounted for person fixed effects.