Computer use and pay for performance

Abstract

Workplace digitalisation is a pervasive phenomenon associated to an increase in wage differentials between occupations. This paper analyses the relationship between computer use and pay for performance, whose incidence has also followed a positive growth pattern. More concretely, we examined three pay-for-performance schemes: productivity/piece rate, team and firm pay for performance. We also investigated the mediating role of job design in this relationship. The complementarity framework perspective and the economic theory of incentives were the theoretical approaches applied in the development of hypotheses. Data from four waves of the European Working Conditions Survey were used in the empirical analyses. A positive association was found between computer use and the three pay for performance schemes considered, particularly team and firm pay for performance. The results also indicated that this relationship was partially explained by changes in job design due to computerisation, such as higher job complexity, on-the-job training and teamwork.