Performance-enhancing compensation practices and employee productivity: The role of workplace bullying

Performance-enhancing compensation practices are designed to increase employee productivity through greater accountability, while highlighting performance differentials across employees. While productivity increases may occur, these practices can also stimulate an unintended consequence: workplace bullying. In this paper, we present a typology and conceptual model that explore the boundary conditions under which performance-enhancing compensation practices may result in bullying behavior with differential effects on target and perpetrator productivity. We propose the mediating roles of individual competition and stress between zero-sum pay systems and workplace bullying. In our model, we propose that perpetrators will realize increased productivity. This increased productivity will be generated through instilling fear in the targeted employee to compete for output, which will increase the perpetrator's relative ranking. As a result, targets will tend to suffer decreased productivity. We conclude with a discussion of the theoretical contributions, practical implications, and offer directions for future research.