Who Fared Better? The Fortunes of Performance Pay and Fixed Pay Workers through Recession

Using the Annual Survey of Hours and Earnings, we explore whether the fortunes of employees paid for performance differ from those of fixed pay workers during recession. Only in the bottom quintile of the wage distribution were performance pay employees more likely to experience greater falls in real wages than fixed pay employees. Accounting for fixed unobserved worker characteristics suggests that this was not due to the wage‐setting mechanism itself, but that other factors are likely to be at play. While across most of the earnings distribution there was little evidence of greater wage flexibility among performance pay employees, they did have longer job tenure than fixed pay employees over the recession.     

The Determinants of Employee Productivity and Earnings

This paper uses data on employee wages and characteristics drawn from a nationwide sample of firms to re-examine the determinants of employee productivity and earnings. The results show that previous experience and tenure in the current job have significant, positive effects on wages and productivity. Hours of training are positively related to productivity and wage growth but generally not to levels of either. Lastly, gender effects are evident. Productivity growth and current productivity levels are slightly higher for females while their wages are significantly lower.     

The Role of Sector-Specific Skills in Post displacement Earnings

This article examines how one form of transferable skills, those valued within an industry or sector, may influence reemployment and earnings following permanent job loss. The empirical analysis finds limited evidence of a sector-specific component to the returns to job tenure. The importance of these skills varies across sectors, with the strongest evidence found for sectors with sustained labor demand and growing employment. There is stronger evidence, particularly in reemployment, for a broader form of sector specificity that is not related to tenure, such as job search skills and vocational training. There is also sectoral evidence that is consistent with the role of individual ability in the returns to tenure.     

What Makes Workers Happy? Anticipated Rewards and Job Satisfaction

Using data collected from over 9400 employees in Armenia, Kazakhstan, Kyrgyzstan, Russia, and Serbia, across a wide variety of workplaces and sectors, we identify the extrinsic and intrinsic rewards that workers desire and expectations of receiving these rewards. We use ordered probit regression analysis to evaluate the association between anticipated rewards and job satisfaction, hypothesizing that reward desirability matters most for extrinsic rewards linked to numeric values. Data strongly support our hypothesis in the case of expected job security; limited support is found in the case of expected promotion. For non‐numeric extrinsic and intrinsic rewards, a strong positive link between job satisfaction and the reward variables often is observed, even if the expected reward is not highly desired. While own earnings typically are positively linked to job satisfaction, peers' earnings may be positively (Kazakhstan, Armenia, Russia) or negatively (Krygyzstan, Serbia) linked to job satisfaction, but not always statistically significant.     

Using Incentive Pay and Providing Pay Supplements in U.S. Job Markets

This article investigates whether the earnings premium found with use of incentive pay is offset by lower supplemental pay. More comprehensive measures of employer costs for employee compensation are used to test the hypothesis. These data indicate that bonuses, overtime work, pension provision, and shift differentials can be less common in jobs with incentive pay, but the lower incidence of these forms of compensation does not offset the higher earnings associated with incentive pay.     

Marketing executives' perceptions of equitable salary increases

Employees' perceptions of fair and equitable salary increases is the subject of this article. Factors hypothesized to be the major determinants of the “perceived amount of pay that should be received” in Lawler's model of pay satisfaction are employed as predictor variables in a multiple regression equation context to explain the observed variation in executives' perceptions of fair and equitable salary increases. A national sample of industrial marketing executives were surveyed. A significant relationship was observed between employees perceptions of fair and equitable salary increases and a number of perceived personal job input and job demands related variables, current salary and wage history, and perceived non-monetary outcomes which are theorized in Lawler's model to be among the major determinants of the perceived amount of pay that should be received.     

Finance,Corporate Governance,and the Employment Relationship

This comparative paper examines the relationship between equity markets and corporate governance on one hand, and job tenure, training, and pay on the other. Two dimensions of equity markets and corporate governance are used: share trading activity and mergers and acquisitions. There is support for the posited links between these measures and job tenure, employee stock ownership plans, pay dispersion, and collective bargaining arrangements. Evidence on the relationship with training is more mixed.     

R&D professionals' reactions to the career plateau: Mediating effects of supervisory behaviours and job characteristics

A career plateau is defined as that point in a person's career which represents a cessation of both lateral and upward movement between jobs. The present study elaborates the idea that a fuller understanding of individual reactions to the career plateau can be achieved by considering supervisory behaviours and job characteristics as variables transmitting the influence of career plateauing to behavioural and attitudinal reaction measures. It is suggested that supervisors invest less attention and resources in plateaued employees and that plateaued employees are assigned to jobs with less motivating potential. Analyses of questionnaire data from 618 R&D professionals in 11 large West German firms show that there are significant differences between plateaued R&D professionals (i. e. those subjects with at least 10 years of job tenure) and a nonplateaued comparison group (i. e. respondents with not more than 6 years of job tenure) controlling for age as a potential confounding influence. Specifically, plateaued R&D professionals indicate less working hours, to be less satisfied with their career and their work, to be less involved in their work, and they tend to produce less publications and patents per year of company tenure. Furthermore, considerable differences are found between one's immediate supervisor's behaviours (e. g. provision of job-related performance feedback) reported by plateaued professionals and their non-plateaued counterparts. However, even after controlling the mediating effects of supervisory behaviours and job characteristics variables plateauing still had a small, but significant detrimental effect on 3 out of 6 reaction measures. Implications are outlined for organizational career management activities.     

Individual Wage Growth: The Role of Industry Experience

This paper focuses on the effect of experience within an industry on wages. I use a correlated random effects simultaneous equation model that allows individual and match heterogeneity to affect wages, job tenure, and industry experience. I estimate my model separately for men and women using a large panel of young Italian workers for the years 1986–2004. Results show that wage returns to industry experience are much higher than wage returns to job seniority. The hypotheses of exogeneity of job seniority and industry experience in the wage equation are rejected: high‐wage workers and high‐wage matches last longer.     

Two paths towards job instability: Comparing changes in the distribution of job tenure duration in the United Kingdom and Germany, 1984–2014

This study provides novel evidence on trends in job stability in the United Kingdom and Germany, two capitalist economies with distinct sets of institutions and labour market reform trajectories. While we find evidence of an increase in short-term jobs for men in both countries, we also find important differences in the overall patterns of change in the distribution of job tenure duration. The United Kingdom follows a masked instability pattern with opposite job stability trends for men and women. On the other hand, we find evidence of a polarization of the job tenure distribution among men and women in Germany. These findings are partly consistent with expectations from the dualization literature, emphasizing a growing segmentation of the labour market between insiders and outsiders. More generally, this study highlights the existence of multiple paths towards increased job instability that appear to be rooted in institutional differences.     

Clientele Effects on the Demand For Housing Price Appreciation

If house buyers are segmented by income, one might expect to observe buyers in such markets valuing the benefits of expected capital gain differently. Presumably, individuals experiencing higher marginal tax rates should be inclined to pay relatively more for anticipated capital gain since the opportunities of sheltering such income from taxation are greater. This paper attempts to identify a proxy for expected capital gain by using the hedonic price methodology to predict a recent price series for each housing unit in a sample of sales. That proxy is then used to determine an individual buyer's marginal willingness to pay for anticipated price appreciation. The results indicate that one cannot reject the joint hypothesis that homebuyers naively extrapolate from prior implied price performance to establish future price expectations and the variation in willingness to pay for that expectation may be a function of the buyer's income. This suggests the existence in housing markets of a phenomenon termed the clientele effect. This effect has been the subject of considerable examination in the finance literature.     

The Determinants of Performance Appraisal Systems: A Note (Do Brown and Heywood's Results for Australia Hold Up for Britain?)

This article offers a replication for Britain of Brown and Heywood's analysis of the determinants of performance appraisal in Australia. Although there are some important limiting differences between our two datasets — the Australia Workplace Industrial Relations Survey (AWIRS) and the Workplace Employment Relations Survey (WERS) — we reach one central point of agreement and one intriguing shared insight. First, performance appraisal is negatively associated with tenure: where employers cannot rely on the carrot of deferred pay or the stick of dismissal to motivate workers, they will tend to rely more on monitoring, ceteris paribus. Second, employer monitoring and performance pay may be complementary. However, consonant with the disparate results from the wider literature, there is more modest agreement on the contribution of specific human resource management practices, and still less on the role of job control.     

The Wage Premium for Job Seniority During the 1980s and Early 1990s

In this article I use Panel Study of Income Dynamics (PSID) data to study whether the rewards for job tenure have fallen since the early 1980s. An upward-sloping seniority-wage profile is generally thought to be an important dimension of compensation during a career. However, recent interest in the incidence of layoffs and changes in the structure of firms gives rise to the possibility that employment contracts are less often being structured to reward tenure or that such contracts are more difficult to honor. Using a two-stage estimator to attempt to control unmeasured individual and job match effects on wages, I find some evidence that the wage premium paid to senior workers has declined moderately. However, I find that these results are mildly sensitive to alternative methods of handling the relatively noisy PSID tenure data.     

Teachers’ Unions,Compensation, and Tenure

In this paper I show that school districts in which teachers negotiate via collective bargaining have greater returns to experience and grant tenure earlier than districts without collective bargaining. Districts that are unionized, either with or without legal collective bargaining protections, have higher returns to degrees and higher starting salaries than districts without a union. Unionization is not strongly correlated with the existence of output‐based pay for performance but is correlated with the use of output‐based measures in tenure decisions. Unionization is positively correlated with the number of junior teachers dismissed for poor performance but not strongly correlated with the number of senior teachers dismissed for poor performance.     

A Note on Inflation and Relative Tenure Prices

This article develops a simplified model of housing costs to analyze the effects of the expected rate of inflation on residential tenure choice. Inflation, working though the Federal Tax Code, affects a number of the components of housing costs in ways which vary between tenure modes. On net, the tax subsidy to owner-occupancy is more positively leveraged with respect to expected inflation than are tax preferences for rental residential real estate. In fact, it is likely that higher expectations of inflation will reduce the after-tax cost of owner-occupied housing.     

The Structure of the Permanent Job Wage Premium: Evidence from Europe

Using individual longitudinal European Community Household Panel data for thirteen countries during 1995–2001 and fixed‐effects models, I find for men, the permanent job wage premium is higher for younger workers and those who were noncitizens or foreign born; for women, the premium is higher for young workers, short‐tenure workers, and those who were noncitizens or foreign born. Thus, the gain to permanent employment is higher for those with less experience in the domestic labor market.     

A Theory of Dual Job Search and Sex‐Based Occupational Clustering

This paper theorizes and provides evidence for the segregation of men into clustered occupations and women into dispersed occupations in advance of marriage and in anticipation of future colocation problems. Using the Decennial Census, and controlling for occupational characteristics, I find evidence of this general pattern of segregation, and also find that the minority of the highly educated men and women who depart from this equilibrium experience delayed marriage, higher divorce, and lower earnings. Results are consistent with the theory that marriage and mobility expectations foment a self‐fulfilling pattern of occupational segregation with individual departures deterred by earnings and marriage penalties.     

Initial compensation of new CEOs hired in turnaround situations

Our paper examines the initial compensation of new CEOs hired in turnaround situations. Building on prior literature on executive job demands, we posit that new CEOs hired in turnaround situations will receive higher pay, particularly higher performance‐based pay, and that the pay premium will incentivize them to undertake retrenchment and restructuring turnaround initiatives. An interaction between pay premium and CEO credentials is shown to have a stronger effect on the extent to which firms engage in such turnaround initiatives. Our empirical results, based on 98 new CEOs hired in 223 turnaround situations, largely support our arguments. We discuss the contribution of our study to the CEO compensation, executive job demands, and corporate turnaround literature. Copyright © 2014 John Wiley & Sons, Ltd.     

Happier with the Same: Job Satisfaction of Disadvantaged Workers

Job satisfaction evaluations depend not only on the objective circumstances that workers experience in their jobs, but also on their subjective dispositions, such as their aspirations, expectations, feelings of entitlement or personal evaluation criteria. We use matched employer–employee data from the United Kingdom to examine whether and how subjective dispositions influencing job satisfaction vary across workers with different socio‐demographic traits. We approximate jobs using detailed occupations within workplaces and find that most of the variability in job satisfaction is at the worker rather than the proximate‐job level, and that workers with disadvantaged statuses report higher satisfaction with the same jobs than those with advantaged statuses.     

The Changing Importance of Lifetime Jobs, 1892–1978

Individual-level data on the job tenure of 2,981 workers surveyed by the California Bureau of Labor Statistics in 1892 are used to estimate the extent of lifetime jobs in that era. Among nonunion, native-born men the proportion in jobs with eventual tenure of 20 or more years was about half, and among foreign-born men a fourth, the rate among men in the modern workforce, consistent with the hypothesis of a fundamental change in employment relations over time. Changes for women were even more pronounced but of a different character.