Okayama Economic Review
Published by the Economic Association of Okayama University


Yamamoto, Kiyoshi
In Japan, the introduction of Performance Related Pay (PRP) has been one of the significant changes in employers' approaches to personnel management in the last few years. In PRP the level of pay is defined and made contingent upon certain levels of performance, and its theoretical framework rests on expectancy theory. This theory is based on assumption that individuals will increase their effort to gain more rewards, resulting in increased performance. So it suggests that expectancy perceptions can be strengthened through appraisal system where the link between effort and performance can be demonstrated. Also many employers use PRP as a strategic tool to force changes in values and cultures of their organizations. However the empirical studies demonstrating the effectiveness of PRP are few in Japan. Therefore a survey of government organizations in the UK known to be recently introduced PRP was carried out. We also implemented comparative studies in organizational culture between Japanese civil service and the UK's, because they could identifY the important factors in introducing and implementing processes of PRP in Japan. The principal findings are : 1) Although the principles of PRP are mainly accepted, PRP does not work well as a monetary incentive for improving performance. 2) The recognition with non-monetary incentives is more effective in promoting employee's motivation than a monetary incentive through PRP. 3) Integrating with performance management system has an impact on the organizational culture. 4) Compared to the Japanese civil service, UK's culture is more result-oriented and enterprising while more procedual and regulated.
論説 (Article)