Performance-Based Rewards and Work Stress

Abstract

Even though reward systems play a central role in the management of organizations, their impact on stress and the well-being of workers is not well understood. We review the literature linking performance-based reward systems to various indicators of employee stress and well-being. Well-controlled experiments in field settings suggest that certain types of performance-based reward systems, such as piece rate pay, cause increases in psychological and physiological stress. Such findings are mirrored in nonexperimental studies as well, but the causal mechanisms for such effects are not well understood. We argue that reward systems generally deserve much more attention in the work stress literature, and identify several mediating and moderating variables worthy of study.

Keywords:

• rewards
• stress
• contingencies