Using Incentive Pay and Providing Pay Supplements in U.S. Job Markets

This article investigates whether the earnings premium found with use of incentive pay is offset by lower supplemental pay. More comprehensive measures of employer costs for employee compensation are used to test the hypothesis. These data indicate that bonuses, overtime work, pension provision, and shift differentials can be less common in jobs with incentive pay, but the lower incidence of these forms of compensation does not offset the higher earnings associated with incentive pay