We address basic questions about performance-related pay in the US. How widespread is it? What characteristics of employers and jobs are associated with it? What are recent trends in its incidence? What factors are responsible for these trends? Nearly two-fifths of hours worked in the US economy in 2013 were in jobs with performance-related pay, but this share has been declining. We consider several possible causes for this trend and find that they do not have much explanatory power. We do establish, however, that any potential explanation must also account for a long-term shift in the relative incidence of performance-related pay away from low-wage and toward high-wage jobs.
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