Performance pay, working hours, and health-related absenteeism

Analysis of broad, U.K. worker-establishment matched panel data from 2004 to 2011 reveals that working hours increase with the fraction of an establishment's workers receiving performance-based pay, if the cutoff for "long weekly hours" is from 35 to 39, but not beyond a sharp discontinuity at 40. Long hours are found to be unrelated to various workplace health problems but positively related to health-related absenteeism. Combined with complementary research on hours and productivity, the results suggest that the well-known productivity enhancements from performance pay are dampened by exhaustion-induced absenteeism stemming from additional working hours and higher per-hour work intensity.