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Social patterns of pay systems and their associations with psychosocial job characteristics and burnout among paid employees in Taiwan

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  • Yeh, Wan-Yu
  • Cheng, Yawen
  • Chen, Chiou-Jung

Abstract

Today, performance-based pay systems, also known as variable pay systems, are commonly implemented in workplaces as a business strategy to improve workers' performance and reduce labor costs. However, their impact on workers' job stress and stress-related health outcomes has rarely been investigated. By utilizing data from a nationally representative sample of paid employees in Taiwan, we examined the distribution of variable pay systems across socio-demographic categories and employment sectors. We also examined the associations of pay systems with psychosocial job characteristics (assessed by Karasek's Demand-Control model) and self-reported burnout status (measured by the Chinese version of the Copenhagen Burnout Inventory). A total of 8906 men and 6382 women aged 25-65 years were studied, and pay systems were classified into three categories, i.e., fixed salary, performance-based pay (with a basic salary), and piece-rated or time-based pay (without a basic salary). Results indicated that in men, 57% of employees were given a fixed salary, 24% were given a performance-based pay, and 19% were remunerated through a piece-rated or time-based pay. In women, the distributions of the 3 pay systems were 64%, 20% and 15%, respectively. Among the three pay systems, employees earning through a performance-based pay were found to have the longest working hours, highest level of job control, and highest percentage of workers who perceived high stress at work. Those remunerated through a piece-rated/time-based pay were found to have the lowest job control, shortest working hours, highest job insecurity, lowest potential for career growth, and lowest job satisfaction. The results of multivariate regression analyses showed that employees earning through performance-based and piece-rated pay systems showed higher scores for personal burnout and work-related burnout, as compared to those who were given fixed salaries, after adjusting for age, education, marital status, employment grade, job characteristics, and family care workloads. As variable pay systems have gained in popularity, findings from this study call for more attention on the tradeoff between the widely discussed management advantages of such pay systems and the health burden they place on employees.

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  • Yeh, Wan-Yu & Cheng, Yawen & Chen, Chiou-Jung, 2009. "Social patterns of pay systems and their associations with psychosocial job characteristics and burnout among paid employees in Taiwan," Social Science & Medicine, Elsevier, vol. 68(8), pages 1407-1415, April.
    • Handle: RePEc:eee:socmed:v:68:y:2009:i:8:p:1407-1415
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    References listed on IDEAS

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    1. Cheng, Yawen & Chen, Chun-Wan & Chen, Chiou-Jong & Chiang, Tung-liang, 2005. "Job insecurity and its association with health among employees in the Taiwanese general population," Social Science & Medicine, Elsevier, vol. 61(1), pages 41-52, July.
    2. Andrew Pendleton & Nicholas Wilson & Mike Wright, 1998. "The Perception and Effects of Share Ownership: Empirical Evidence from Employee Buy-Outs," British Journal of Industrial Relations, London School of Economics, vol. 36(1), pages 99-123, March.
    3. Marc Cowling, 2002. "The extent and determination of performance related pay systems in Scandinavian countries," Applied Economics, Taylor & Francis Journals, vol. 34(3), pages 305-316.
    4. Menéndez, María & Benach, Joan & Muntaner, Carles & Amable, Marcelo & O'Campo, Patricia, 2007. "Is precarious employment more damaging to women's health than men's?," Social Science & Medicine, Elsevier, vol. 64(4), pages 776-781, February.
    5. Marc Cowling, 2000. "Performance related pay in Belgium and The Netherlands," Applied Economics Letters, Taylor & Francis Journals, vol. 7(10), pages 653-657.
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    1. Ilija Coric & Katija Vojvodic, 2018. "Variable Pay 2.0: Transforming The Post-Transitional Context In Warehouse Logistics," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 18, pages 109-123.
    2. Weiyi Zhang & Hiromasa Takahashi & Junyi Shen, 2016. "Does Physical Exercise Affect Tradeoffs between Fixed Pay and Performance-related Pay for Individuals?," Discussion Paper Series DP2016-13, Research Institute for Economics & Business Administration, Kobe University.
    3. Ilija Coric & Katija Vojvodic, 2015. "Variable Pay: A Case Study In Warehouse Logistics," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 15, pages 189-200.
    4. Marko Živanović & Emina Borjanić Bolić & MaÅ¡a VukÄ ević Marković, 2021. "Psychometric Properties and Structural Validity of the Serbian Version of the Copenhagen Burnout Inventory (CBIser)," SAGE Open, , vol. 11(4), pages 21582440211, October.

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