Undermining or reframing collective bargaining? Variable pay in two sectors compared

Although it is widely presumed that variable payments systems (VPS) such as individual merit and profit‐related pay are corrosive of collective bargaining, the actual relationship between the two remains little explored. Drawing on company case studies from retail banking and machinery and equipment, this article finds that collective bargaining can variously be reconfigured – as over individual merit pay in the banks; extended to cover local bonus arrangements, evident in instances in both sectors; or lose its purchase on a significant proportion of earnings – as with management‐determined profit‐related bonus in both sectors. In terms of the implications for collective bargaining, much therefore depends on the type of VPS.     

Fluidity,Identity, and Organizationality: The Communicative Constitution of Anonymous

This paper examines how fluid social collectives, where membership is latent, contested, or unclear, achieve ‘organizationality’, that is, how they achieve organizational identity and actorhood. Drawing on the “communicative constitution of organizations” perspective, we argue that the organizationality of a social collective is accomplished through ‘identity claims’ – i.e., speech acts that concern what the social collective is or does – and negotiations on whether or not these claims have been made on the collective's behalf. We empirically examine the case of the hacker collective Anonymous and analyse relevant identity claims to investigate two critical episodes in which the organizationality of Anonymous was contested. Our study contributes to organization studies by showing that fluid social collectives are able to temporarily reinstate organizational actorhood through the performance of carefully prepared and staged identity claims.     

Collective rationality and functional wisdom of the crowd in far-from-rational institutional investors

The average portfolio structure of institutional investors is shown to reproduce the structure which optimally accounts for transaction costs when investment constraints are weak. Strikingly, this result emerges even though these investors are not aware of the existence of such law and despite the fact that their aims and tools are very heterogeneous. This extends the so-called wisdom of the crowd to much more complex situations in two important ways. First, wisdom of the crowd also holds for whole functions instead of a point-wise estimates. Second, this shows that in socio-economic systems, the optimal individual choice may only be found when the diversity of individual decisions is averaged out. Thus, rationality at a collective level does not need nearly rational individuals with well-aligned incentives. Finally we discuss the importance of accounting for constraints when assessing the presence of wisdom of the crowd.

     

Shaping the bargaining agenda. The Audit Commission and public service reform in British local government

This article examines the role of the Audit Commission (AC) in local government collective bargaining. While the AC has no official role in such bargaining, it has a role in monitoring the performance of local government services. In this role the AC has a clear potential, in the context of the government's ‘modernization’ agenda – as manifested in its ‘Best Value’ regime, for influencing both the content of collective agreements, and the process of collective bargaining, where these are seen to conflict with other Best Value objectives – particularly in relation to external competition. The research conducted involved a content analysis of AC inspection reports on human resource services and longitudinal case studies of two local authority union branches' experiences of Best Value and the role of the AC. The findings from the inspection reports indicate that, while the AC is actually acting to promote activities that could be seen as supportive of union bargaining agendas, notably in relation to equality type issues, they are also supporting service externalisation and thereby acting to limit the scope of their impact. The reports also indicate that, despite there being prescribed ‘best practice’ for local government employment relations (‘social partnership’ with unions), the AC is not promoting any such engagement with unions. Evidence from the case studies add weight to these observations: the AC, in one case, was deeply suspicious of an attempted union management agreement on procurement, while in the other, the AC made no criticism of the costly effects that externalization had on union-management relations.     

Rankings,Performance, and Sabotage: The Moderating Effects of Target Setting

Competitive performance rankings are widely used in organizations. Such incentive systems enable agents to improve their performance ranking not only by increasing their own performance, but also by undermining their competitors’ performance. While previous accounting studies have stressed the positive effect of ranking systems on managerial effort, the present paper investigates when such ranking systems may induce sabotage, and how this unintended effect can be mitigated. Our study is based on a laboratory experiment designed to investigate (a) whether competitive performance feedback increases an agent’s inclination to disrupt the efforts of competitors, in a case where ranking has no effect on compensation and (b) whether the presence of a self-set absolute performance target moderates these effects. Our results show that ranking increases both performance and sabotage. Adding an absolute performance standard appeared to reduce sabotage. However, when there is an absolute target, performance is higher in the absence of ranking. Overall, our results thus suggest that performance benefits from the use of either a relative or an absolute performance target, but not from their simultaneous use.     

Intrinsic Motivation and the Logic of Collective Action: The Impact of Selective Incentives

I integrate the notion of intrinsic motivation, applied to economics most notably by Frey (1997 ), into the logic of individual contributions toward collective goods as analyzed since Olson ([1965] 1971 ). This illuminates the many and various ways through which the intrinsic motivation to contribute toward such goods can be crowded out by the application of selective incentives. I suggest that the crowding‐out effect increases the cost to society of organizing the provision of collective goods and argue in favor of designing selective incentives that mitigate this effect.     

Board Composition and Organizational Performance: Two Studies of Insider/outsider Effects

This paper presents two studies that examine the commonly held belief that corporate boards are more likely to have positive effects on organizational performance when composed of outside directors. The first study – a meta-analysis of 63 correlations – indicates that, on average, the greater presence of outsiders is associated with higher performance, but so too is the greater presence of insiders. Instead of providing evidence of a positive outsider effect, these results suggest the existence of a curvilinear homogeneity effect in which performance is enhanced by the greater relative presence of either inside or outside directors. The second study – a hierarchical polynomial regression analysis of data from 259 large US companies – confirms the existence of a curvilinear relationship between insider/outsider composition and performance measured as return on assets.     

Distorted Performance Measures and Dynamic Incentives

Incentive contracts must typically be based on performance measures that do not exactly match the agents' true contribution to the principals' objectives. Such misalignment may pose difficulties for effective incentive design. We analyze the extent to which implicit dynamic incentives, such as career concerns and ratchet effects, alleviate or aggfravate these problems. Our analysis demonstrates that the interplay between distorted performance measures and implicit incentives implies that career and ratchet effects have real effects in that stronger ratchet effects or greater distortion may increase optimal monetary incentives, and that distortion affects the optimality of different promotion rules.     

Bargaining: separately or together?

This paper explores conditions under which economic agents will want to bargain collectively instead of individually with a common third party—when, for example, two firms (or unions), who are bargaining with the same, indispensable, outside party, will want to merge and bargain as one. I use a non-cooperative sequential bargaining model to analyze this question. Previous work has shown that agents prefer to bargain collectively if they are substitutes for each other in production. This result, however, depends on an exogenously fixed sequence of bargaining. I allow the bargaining sequence to be determined endogenously and investigate how incentives for collective bargaining vary with heterogeneity when delay is costly. The previous results are not robust when the agents are substitutes. In particular, substitute agents prefer individual to collective bargaining if they are heterogeneous and sufficiently patient. In the presence of transaction costs, substitutability of agents is no longer the sole determinant of collectivization. Rather, the degree of heterogeneity in production, in conjunction with the degree of substitutability between agents determine the incentives for collective action.     

Second generation fiscal federalism: The implications of fiscal incentives

First generation fiscal federalism (FGFF) studies the performance of decentralized systems under the assumption of benevolent social planners. Second generation fiscal federalism (SGFF) studies performance based on the fiscal and political incentives facing subnational officials. The paper focuses on three aspects of SGFF. First, it considers the design of intergovernmental transfers. While FGFF emphasizes correcting vertical and horizontal equity, SGFF emphasizes the importance of fiscal incentives for producing local economic prosperity. SGFF extends FGFF approaches by showing how non-linear transfer systems can produce both equalization and high marginal fiscal incentives to produce local economic growth. Second, the paper raises the fiscal incentive approach, showing how different tax systems produce different fiscal incentives for political officials to choose policies. Third, the paper discusses the interaction of democracy and fiscal federalism.     

Performance-related pay in Chinese professional sports

There have been numerous research studies and discussions of performance-related pay (PRP) in the human resource management literature, but very little research on PRP has included samples from non-Western societies. Moreover, few have studied PRP in the sport sector. The present study supports an expectancy model framework for PRP for professional athletes in China. The findings indicate the importance of the valence for monetary incentives, the instrumentality of performance for these incentives and clear individual and group objectives for improving performance. Comparisons for individual versus team and for females versus males yield important differences in the perception of the components of PRP programmes.     

Trade unions,collective bargaining and macroeconomic performance: a review

Coordination through collective bargaining is recognised as an influential determinant of labour market outcomes and macroeconomic performance. This article provides a systematic review of the empirical literature on the subject. What emerges from the review is that it is different types and coverage of bargaining coordination, rather than cross‐country variation in trade union density, that matter for economic performance. High levels of bargaining coverage tend to be associated with relatively poor economic performance, but this adverse relationship can be at least mitigated by high levels of bargaining coordination. In the absence of formal bargaining arrangements, economies often develop informal bargaining mechanisms whose effects are similar to those arising from formal bargaining provided they both operate at similar levels of coordination. The consequences of labour market coordination or absence thereof depend on the monetary policy regime as non‐accommodating monetary policy can eliminate some of the adverse unemployment consequences otherwise associated with industry‐level collective bargaining. Finally, bargaining coordination seems to matter most in times of rapid economic change rather than under more stable conditions. Overall, we conclude that it is the total ‘package’ of (formal and informal) labour market institutions that matters for the performance of the economy rather than unionisation as such or individual aspects of unionism.     

Effects of control on the performance of information systems projects: The moderating role of complexity risk

Control of projects is a core issue for organizations. Successful projects, such as information systems projects, enable organizations to develop a superior supply network and enhance the capability of operations management. A few studies have investigated the effects of control on project performance; however, complexity risk has not been integrated into the relationship between control and performance. Limited evidence has been provided concerning whether modes of control differ in their effectiveness in the presence of a single risk factor. Based on quantitative data obtained from 128 information systems projects, behavior, outcome, clan, and self-control are empirically determined to be positively associated with the system performance of projects. However, complexity risk generates a mixed moderating effect on the relationship between control and performance. In the presence of a high complexity risk, the effects of behavior and self-control on performance are low, whereas the effectiveness of outcome and clan control increases. This finding implies that complexity risk is a double-edged sword with regard to control. Each control mode exhibits different characteristics and effectiveness under high complexity risk. Therefore, appropriate control modes should be carefully selected, and highly effective control modes, such as outcome and clan control, should be prioritized in managing complex system projects.     

The impact of incentives on the accuracy of subjects in judgmental forecasting experiments

There is an ongoing debate in the social sciences about whether or not financial incentives are needed in order to obtain good performance from experimental subjects. This debate often extends into the research on judgmental forecasting. Thus, an experiment was conducted to assess the effects of financial incentives on time series forecasting accuracy. There was no evidence that financial incentives impacted forecasting accuracy in stable time series. Financial incentives also had no impact immediately after instabilities occurred and no impact once the trend in the data had fully emerged.     

Incentives in academics: Collaboration under weak complementarities

This paper considers a contracting relationship with multiple agents in a repeated setting under voluntary team formation. In each period, an opportunity to collaborate arrives stochastically but whether this opportunity has arrived is the agents' private information. The principal thus cannot simply tell them when to collaborate; she must instead guide them through incentives. The optimal contract in the repeated setting can drastically be different from that in the static setting and is often characterized as high-powered team incentives complemented with inefficiently low-powered individual incentives, which endogenously raise the cost of shirking. We then argue that low-powered incentives offered for non-collaborative works, as often observed in our profession, can be seen as an important part of optimal incentive schemes in an attempt to endogenously raise the cost of shirking. The mechanism presented here also has implications for internal team competition (team competition within firms) which has become increasingly popular these days.     

Tournament Compensation Systems,Employee Heterogeneity,and Firm Performance

Tournament compensation systems are widely used in practice and have been extensively analyzed theoretically. However, one major problem has hardly been studied in a company context so far: Although it is theoretically well understood that tournament compensation systems are only effective when employees are homogeneous, it has rarely been analyzed what companies can do when they are confronted with employee heterogeneity. In our article, we derive hypotheses on the performance effects of tournament compensation systems in a context of employee heterogeneity based on tournament and expectancy theory. Using personnel records from incentive travel contests, we are able to show that performance is lower in a situation with employee heterogeneity, but that in heterogeneous tournaments, incentives may still work for a subgroup of employees whom we term the “threshold group.” In addition, we also show how companies manage to design the information disclosure systems necessary to install effective “handicapping” or “league‐building” systems in order to increase the effort‐performance expectancy.     

Recognizing the benefits of diversity: When and how does diversity increase group performance?

Diversity does not only bring positive consequences. It has often been recognized that heterogeneity in teams can reduce intra-group cohesiveness, and that it can lead to conflicts and misunderstandings which, in turn, can lower employee satisfaction, citizenship behaviors and increase turnover. On the other hand, there is also evidence for performance-increasing effects of diversity because it can improve creativity and innovation through the team members' greater variety of perspectives. Little is known, however, about the conditions and the psychological mechanisms required for increasing group performance under diverse settings. Answers to research questions such as how and when diversity influences performance at work are still limited. The purpose of the paper is to provide theoretical answers to these questions by proposing a model of managing diversity which draws on social psychology theories. The model brings a new perspective by identifying the process of learning from one another's identity within a group. This process underlies two different levels of mechanisms (individual and group level). The model proposes that when these social psychological mechanisms are activated, diversity will lead to an increase in group performance. The model also suggests that collective identity is salient and when psychological safety climate are the psychological conditions that activate these mechanisms.     

A comparative study of performance appraisals,incentives and rewards practices in domestic and multinational enterprises in the country of Brunei Darussalam

Very little work in the past has focused on the comparative analysis of human resource management (HRM) practices between domestic and multinational enterprises (MNEs). The majority of the work in this area has instead concentrated on comparing the HRM practices utilised by the subsidiaries of MNEs, and has mostly been conducted in the context of developed countries. In this paper, we examine how the HR practices of appraisals, rewards and incentives are offered, explained and monitored in domestic enterprises (DEs) versus MNEs, and how they are similar or different in nature. This paper is based on primary data collected from a cross-section of firms operating in the country of Brunei Darussalam – a context within which no previous work of this nature has been undertaken. An analysis reveals several interesting results: HR practices are more advanced and better structured in MNEs that conduct performance appraisals (PA) more frequently than DEs, and their feedback system is also rapid; incentives and rewards systems in MNEs follow market ethos and principles; the HR directors and employees of MNEs are more receptive to PA than those in DEs whilst, in contrast to DEs, incentives and rewards systems in MNEs follow market ethos and principles. Furthermore, with regard to size, younger firms are more likely to be following market principles in terms of explaining incentives and rewards systems to their employees, whilst older firms claim that working for them carries social and psychological benefits for employees.     

The Dialectics of White-Collar Crime

A bstract TWO perspectives prevail in analyses of the savings and loan industry's crisis of the 1980s and early 1990s: on one hand are claims of individual fraud and greed; on the other are arguments focusing on organizational factors, particularly the deregulated environment in which lax or nonexistant oversight encouraged "collective embezzelment." Both approaches rely on a narrow conceptualization of the concept of white-collar crime that focuses on identification of the static dimensions that differentiate white-collar crime from other crimes. We apply Schlegel and Weis-burd's (1993) notion of white-collar crime as more of an interactive process than a set of unique defining factors by combining a theoretical focus on the state's policy-making process with an analysis of organizational and occupational crime to analyze the role the state may play in creating the structural environment facilitating those behaviors. We analyze the case of Silverado Banking, Savings and Loan Association to examine the behavioral effects of implementing a state policy of deregulation. The case suggests that state policy may not only regulate and restrict behavior, but actually contain defeating incentives that create corporate behaviors contradicting the policy's intention. This points to the limitation of state theory in its focus on de jure policy creation as opposed to de facto policy implementation and its behavioral and structural consequences. Finally, we suggest that organizational crimes may result not only from circumventing or violating laws that must be enforced; they may also derive from contradictions contained in the policies of state projects themselves. As such, organizational crimes and deviant behavior may be better understood as unintended consequences of the dialectics of state projects.     

Coproducing healthcare: individual-level impacts of engaging citizens to develop recommendations for reducing diagnostic error

ABSTRACT

Coproduction has received considerable attention from scholars and practitioners in recent years. While theory and some research suggest that coproduction can have individual-level effects on participating lay actors, few studies have tested such hypothesized effects. This study seeks to add to the evidence base for collective coproduction. Using data from a randomized and controlled research project, it examines whether collective coproduction affects participants’ issue awareness, perceived empowerment, trust in service professionals, and support for coproduction. The results provide empirical evidence that collective coproduction can significantly increase issue awareness, empowerment, and trust. The results for support of coproduction are mixed.