The Effect of Pay on Job Satisfaction and Performance in the UK NHS

For nearly a decade, the UK NHS has been using performance-related compensation to motivate health care professionals to perform their jobs well. Research demonstrates that the job satisfaction of health care professionals has a significant, positive impact on health outcomes and that income affects job satisfaction. Missing, however, are studies on just how changes in compensation affect health care professionals’ enjoyment of their jobs and, so, personal motivation to do them well.

For nearly a decade, the UK NHS has been using performance-related compensation to motivate health care professionals to perform their jobs well. Research demonstrates that the job satisfaction of health care professionals has a significant, positive impact on health outcomes and that income affects job satisfaction. Missing, however, are studies on just how changes in compensation affect health care professionals’ enjoyment of their jobs and, so, personal motivation to do them well. Without knowing these relationships, it is unclear (1) whether financial incentives in fact provide the motivation that most assume, (2) if financial incentives have unintended consequences and (3) what mix of personal (internal) motivation and performance management (external motivation) may produce the best result.

Understanding more about compensation and motivation of health care professionals is important to the success of the NHS and to the reform efforts. OHE’s Yan Feng has been researching the issues using the British Household Panel Survey (BHPS) for 1992 through 2008. Yan chose the BHPS because it includes self-reported information from nurses on two specific types of job satisfaction that can be used as proxies for internal and external motivation.

Preliminary results were discussed at the 2011 Scottish Health Informatics Programme conference. Full results will be reported here as soon as they are available.