Abstract External environment of an organization includes a variety of factors, whose existence, influence its behavior and performance. The action of these factors may be direct (for example, the actions of competitors) or indirect (for example, changes in business climate), and external...

This study uses cross-section and panel data from the 1998 Workplace Employee Relations Survey to explore contextual influences on the relationship between performance-related pay (PRP) and organizational performance. While it finds strong evidence that the use of PRP can enhance performance...