The Legitimacy of Performance-Related Pay in Swedish Public Sector Organisations

Abstract

This study analyses the legitimacy of different pay determination principles in Swedish public sector organisations. The aim is to explore what dimensions of worth exist in pay determination and to analyse the extent to which differences in legitimacy can be explained by organisational position, professional identity and organisational context. Theoretically, the article is influenced by “valuation studies” and the “institutional logics” and “orders of worth” approaches in analysing the existence of multiple dimensions of pay determination. Empirically, the study is based on surveys to employees and managers. The main results are that individual performance is the most legitimate dimension of worth, although job requirements and employee behaviour also have a high level of legitimacy. Formal individual competence and market value have a somewhat lower level of legitimacy, while organisational results is the dimension that has least legitimacy. In addition, the perceptions of legitimacy are shown to vary somewhat with position, profession and organisational context.