Although pay-for-performance’s potential effect on employee performance is a compelling issue, understanding this dynamic has been constrained by narrow approaches to pay-for-performance ...conceptualization, measurement, and surrounding conditions. In response, we take a more nuanced perspective by integrating fundamental principles of economics and psychology to identify and incorporate employee characteristics, job characteristics, pay system characteristics, and pay system experience into a contingency model of the pay-for-performance–future performance relationship. We test the role that these four key contextual factors play in pay-for-performance effectiveness using 11,939 employees over a 5-year period. We find that merit and bonus pay, as well as their multiyear trends, are positively associated with future employee performance. Furthermore, our findings indicate that, contrary to what traditional economic perspectives would predict, bonus pay may have a stronger effect on future performance than merit pay. Our results also support a contingency approach to pay-for-performance’s impact on future employee performance, as we find that merit pay and bonus pay can substitute for each other and that the strength of pay-for-performance’s effect is a function of employee tenure, the pay-for-performance trend over time, and job type (presumably due to differences in the measurability of employee performance across jobs).
Purpose This study aims to explore how individual-level and organizational-level factors interact to influence pay information (PI) seeking and PI sharing preferences in PI conversations (i.e. the ...face-to-face communications context). The authors examine how an individual’s judgment of their pay relative to others – or pay equity perception – affects their PI seeking and PI sharing preferences and how those relationships are affected by organizationally created pay transparency policies and pay transparency practices. Design/methodology/approach Using a 2 × 2 × 2 experimental design on the MTurk platform, the authors used a scenario-based prompt method to manipulate employee perceptions of pay equity and organizational pay transparency and tested those effects on employee pay disclosure preferences. The authors consider both pay policy and pay practice dimensions of pay transparency and both PI seeking and PI sharing dimensions of pay disclosure preferences. The final sample had 597 participants. Findings The authors find employees’ pay equity perceptions are negatively related to PI seeking behaviors and are even more so when organizations have restrictive pay transparency policies. Also, both pay transparency policy and pay transparency practice increase PI sharing preferences. Originality/value The authors provide insight into how individual perceptions drive pay disclosure motivations and the role of organizational policy and practice in influencing pay disclosure preferences within PI conversations. The authors provide insight into the antecedents that shape pay disclosure preferences, which lead to a both PI conversations among coworkers and an increase in one’s pay understanding. This study shows the contextual nature of PI seeking and PI sharing preferences, which are a motivational antecedent to pay-related sensemaking behaviors.
A myth-busting book challenges the idea that we're paid
according to objective criteria and places power and social
conflict at the heart of economic analysis. Your pay
depends on your productivity ...and occupation. If you earn roughly
the same as others in your job, with the precise level determined
by your performance, then you're paid market value. And who can
question something as objective and impersonal as the market? That,
at least, is how many of us tend to think. But according to Jake
Rosenfeld, we need to think again. Job performance and occupational
characteristics do play a role in determining pay, but judgments of
productivity and value are also highly subjective. What makes a
lawyer more valuable than a teacher? How do you measure the output
of a police officer, a professor, or a reporter? Why, in the past
few decades, did CEOs suddenly become hundreds of times more
valuable than their employees? The answers lie not in objective
criteria but in battles over interests and ideals. In this contest
four dynamics are paramount: power, inertia, mimicry, and demands
for equity. Power struggles legitimize pay for particular jobs, and
organizational inertia makes that pay seem natural. Mimicry
encourages employers to do what peers are doing. And workers are on
the lookout for practices that seem unfair. Rosenfeld shows us how
these dynamics play out in real-world settings, drawing on
cutting-edge economics, original survey data, and a journalistic
eye for compelling stories and revealing details. At a time when
unions and bargaining power are declining and inequality is rising,
You're Paid What You're Worth is a crucial resource for
understanding that most basic of social questions: Who gets what
and why?
Teacher Merit Pay: A Meta-Analysis Pham, Lam D.; Nguyen, Tuan D.; Springer, Matthew G.
American educational research journal,
06/2021, Volume:
58, Issue:
3
Journal Article
Peer reviewed
Empirical research investigating the association between teacher pay incentives and student test scores has grown rapidly over the past decade. To integrate the findings from these studies and help ...inform the debate over teacher merit pay, this meta-analysis synthesizes effect sizes across 37 primary studies, 26 of which were conducted in the United States. Among the U.S. based studies, the results suggest that the effect of teacher merit pay on student test scores is positive and statistically significant (0.043 standard deviation). This summary effect varies by program design and study context, suggesting that teacher merit pay has the potential to improve student test scores in some contexts but researchers and policymakers should pay close attention to program design and implementation.
In all Western societies women earn lower wages on average than men. The gender wage gap has existed for many years, although there have been some important changes over time. This volume of ...collected papers contains extensive research on progress made by women in the labor market, and the characteristics and causes of remaining gender inequalities. It also covers other dimensions of inequality and their interplay with gender, such as family formation, wellbeing, race, and immigrant status. The author was awarded the 2010 IZA Prize in Labor Economics for this research. Part I comprises an Introduction by the Editors. Part II probes and quantifies the explanations for the gender wage gap, including differential choices made in the labor market by men and women as well as labor market discrimination and employment segregation. It also delineates how the gender wage gap has decreased over time in the United States and suggests explanations for this narrowing of the gap and the more recent slowdown in wage convergence. Part III considers international differences in the gender wage gap and wage inequality and the relationship between the two. Part IV considers a variety of indicators of gender inequality and how they have changed over time in the United States, painting a picture of significant gains in women's relative status across a number of dimensions. It also considers the trends in female labor supply and what they indicate about changing gender roles in the United States and considers a successful intervention designed to increase the relative success of academic women. Part V focuses on inequality by race and immigrant status. It considers not only race difference in wages and the differential progress made by African-American women and men in reducing the race wage gap, but also race differences in wealth which are considerably larger than differences in wages. It also examines immigrant-native differences in the use of transfer payments, and the impact of gender roles in immigrant source countries on immigrant women's labor market assimilation in the U.S. labor market.
ABSTRACT
Beginning in 2018, U.S. public firms were required to report the ratio of the chief executive officer's (CEO) compensation to their median employee's compensation in the annual proxy ...statement. Exploiting the staggered reporting of pay ratios, we find little evidence that total CEO compensation changes in response to pay ratio disclosure reform. However, we do find that boards significantly adjust the mix of compensation awarded by reducing the sensitivity of CEO pay to equity price changes, particularly when the CEO is likely to garner media scrutiny, and by reducing reliance on stock‐based and other compensation components that are most susceptible to media coverage surrounding the pay ratio disclosure. Firms ultimately disclosing higher pay ratios garner more media coverage around the filing of their proxy statement, and more negative‐toned coverage in the subsequent month. Finally, we find evidence that greater pay disparity is associated with greater selling activity by retail investors and more negative say‐on‐pay votes following pay ratio reform, consistent with a broad set of investors responding to public scrutiny resulting from pay ratio disclosures.
When genetic tests are not funded publicly, out‐of‐pocket (OOP) pay options may be discussed with patients. We evaluated trends in genetic testing and OOP pay for two publicly funded British Columbia ...clinical programs serving >12 000 patients/year (The Hereditary Cancer Program HCP and Provincial Medical Genetics Program PMGP) between 2015–2019. Linear and regression models were used to explore the association of OOP pay with patient demographic variables at HCP. An interrupted time series and linear and logistic regression models were used on PMGP data to examine the effect of a change in the funding body. The total number of tests completed through PMGP, and HCP increased by 260% and 320%, respectively. OOP pay increased at HCP by 730%. The mean annual income of patients who paid OOP at HCP was ≥$3500 higher than in the group with funded testing (p < 0.0001). The likelihood of OOP pay increased at PMGP before the funding body change (OR per month: 1.07; 95% CI: 1.04, 1.10); while this likelihood had an immediate 87% drop when the change occurred (OR: 0.13; 95% CI: 0.06, 0.32). Patients with higher incomes are more likely to pay OOP. Financial barriers can create disparities in clinical outcomes. Funding decisions have a significant impact on rate of OOP pay.
We evaluated trends in genetic testing and out‐of‐pocket (OOP) pay for two publicly funded clinical genetics programs between 2015–2019. The total number of tests and rates out‐of‐pocket pay increased over time. Patients with higher incomes were more likely to pay OOP. Financial barriers can create disparities in clinical outcomes.
Pay transparency, or the disclosure of pay information to workers, is a topic that is both old and new. The debate over whether pay information should be kept confidential or openly shared can be ...traced back to the 1960s. During that era, issues of discrimination and inequality were prominent topics of discussion. To uphold workers' rights under the Equal Pay Act of 1963, which stipulated that workers should receive equal pay for equal work, it was imperative to enable employees to have information on how others, especially those in similar roles, are paid. In line with context, management scholars investigated the consequences of pay transparency. However, the discussions concerning pay transparency did not advance further after the 1980s.
We use a hypothetical choice methodology to estimate preferences for workplace attributes from a sample of high-ability undergraduates attending a highly selective university.We estimate that women ...on average have a higher willingness to pay (WTP) for jobs with greater work flexibility and job stability, and men have a higher WTP for jobs with higher earnings growth. These job preferences relate to college major choices and to actual job choices reported in a follow-up survey four years after graduation. The gender differences in preferences explain at least a quarter of the early career gender wage gap.
PDF