Performance related pay in practice : organisation and effect
During the 1980s and 1990s, in the area of pay, 'performance-related pay schemes' (PRP) became the ultimate buzz-word. The popularity of PRP reflected pressure from two main sources. The first was management practitioners and consultants, the second the goverments of the day. Both were reacting to what they saw as a possible cure for the ills of economic recession. In other words, the concept fitted well with an ethos of what successful companies should look like and the kinds of policies that they should be utilising. This thesis highlights the complexities of the organisation and the effects of PRP in 16 case study organisations. It argues that, conceptually, PRP can be examined with greater analytical foresight from a control perspective than from the usual starting position of whether PRP is motivational or not. In an attempt to highlight this, two processes were explored. The first process concerns the 'effort bargain'. This involves the reorganisation of work in a bid to standardise effort measurement, combined with attempts to intensify effort levels. The second is a 'process bargain' which includes a change to an organisation's administration systems. Examples include human resource management, differing systems of budgetary control and performance management which all involve subsequent changes to systems of rules, measurement and control. Importantly, it will be argued that this is not a search for control per se as simple labour process theory would predict. Representing control and reactions to it as homogeneous is dangerous and misleading, and leads to labour control systems becoming the sole focus of crisis. Rather, PRP represents part of a wider search for competitive advantage which includes restructuring and changes to the organisation. While vagueness in the objective setting process was common to many of the organisations, the research found that the changes in the companies studied here were complicated by a search for control, compliance and consent. Further, the outcomes were largely specific to each organisation, depending on the negotiation of the 'politics of pay'. Ways in which they were aiming to do this were as follows: control labour costs and their distribution, 'mass individualism' - individual but standardised contracts, flexible standardisation - the combined search for flexibility and standardisation simultaneously and management - as agents of restructuring. An important omission was made in this process, however, and this involved performance itself. In a bid to balance out the many contradictory forces, performance was actually one of the last issues to be dealt with. The research highlights why this is so. What the above implies is that faced with crisis, organisations become involved in a renegotiation of effort and systems of control. PRP is one way of achieving this in some organisations.