Determinants and Impact of Performance-Related Pay Perception

In: Compensation and benefits review, Band 48, Heft 3-4, S. 66-80

Abstract

Performance-related pay (PRP) was introduced in central public sector enterprises (CPSEs) in India with the objective of establishing a performance-oriented culture. PRP is a newly implemented concept in Indian CPSEs. This article attempts to investigate the factors that influence PRP perception in Indian CPSEs and also to study the impact of PRP perception on job satisfaction and employee performance. The study examines the determinants of PRP perception with the help of multiple regression analysis. The study also explores the role of PRP perception as an intervening variable, and the hypotheses are tested using mediation. This study will help policy makers in developing a holistic and integrated compensation plan/system in public sector enterprises and will add to the little existing literature on determinants and impact of PRP perception in public enterprises.