Output Pay and Ethnic Wage Differentials: Canadian Evidence

Using the Workplace and Employee Survey, we are the first to examine the association between payment method and ethnic wage differentials in Canada. Following earlier theory, we hypothesize that output pay tying earnings to productivity makes it more difficult for employers to discriminate. The empirical estimations show that non‐Europeans in Canada paid by time rates receive lower earnings than Europeans paid by time rates. Yet, non‐Europeans paid by output pay receive virtually identical earnings to their European counterparts.     

Pay dispersion and workforce performance: moderating effects of incentives and interdependence

The compensation literature is replete with arguments, but lacking in empirical tests, regarding the effects of pay dispersion on organizational outcomes. Pay dispersion may increase effort and provide incentives for high workforce performance levels, but may also inhibit cooperation and goal orientation among employees. Drawing on several theoretical perspectives (individual motivation, institutional theory, organizational justice, and neoclassical economics), this study predicts that pay dispersion will be associated with higher levels of workforce performance when accompanied by formal individual incentive systems and independent work, while pay compression is desirable in the absence of individual incentive systems and when work is interdependent. Survey research studies in two industrial sectors (the motor carrier and concrete pipe industries) were conducted to address these issues. Interactive regression results were generally supportive of the predictions across several measures of workforce performance (accident rates, safety violations, and productivity). Implications of these studies for strategy implementation in terms of compensation theory and practice are addressed. Copyright © 2002 John Wiley & Sons, Ltd.     

Does an Entrepreneurial Career Pay for Women in China?

Using data from the Chinese Household Income Project survey in 2013, our male–female pay‐gap decomposition illustrates that the gender earnings gap is larger among the self‐employed than the wage‐employed after controlling for the effect of various pay‐determining characteristics. Our self‐employed versus wage‐employed decomposition also controls for selection into self‐employment as well as those pay‐determining characteristics. We find that wage‐employed women would earn less than their current earnings if they shifted to self‐employment, while wage‐employed men would earn more than their current earnings if they became self‐employed. In essence, self‐employed women suffer from double jeopardy. They not only earn less than men in self‐employment due to lower returns for the same pay‐determining characteristics, but women in self‐employment also earn less than women in wage employment when they have the same pay‐determining characteristics.     

Executive compensation and firm performance in Italy

We use survey data to investigate the determinants of executive pay in a sample of Italian firms. To the best of our knowledge this is the first empirical study on the compensation of Italian executives. Our key hypothesis is that the characteristics of the Italian capital market, corporate governance and the specific relationship between banks and firms imply a low fraction of incentive pay over total compensation and a low sensitivity of incentive pay to firm performance. We find evidence that supports this hypothesis. We estimate that an increase of real profits per firm by 1 billion lire increases the pay of upper and middle managers by only 31 thousand lire, more than the increase found for lower management (6 thousand). Furthermore, pay–performance sensitivity is higher in foreign-owned firms, in listed firms, and in firms affiliated to a multinational group.     

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.     

What Has Been Happening to Pay in the Public-Service Sector of the British Economy? Developments over the Period 1970–1992

This study presents a detailed analysis of the most important developments in public-service workers' pay over the period since 1970. It records the real earnings growth of all the largest groups of public-service workers in Britain and details the consequences of the different rates of earnings growth enjoyed by the various groups for pay differentials and relative pay in the public sector. It details the size of wage settlements and calculates the magnitude of wage drift for all major groups of public-service-sector workers, and it considers the extent to which the fastest rates of earnings growth appear to result from particular institutional arrangements for determining pay, offering a brief discussion of the role of pay review bodies in this process. The study uses unpublished data from the New Earnings Survey together with detailed information on the size and timing of wage settlements over the period 1970–1992.     

Directors' Pay in the Privatized Utilities

This exploratory paper examines the relationship between the remuneration of the highest paid director and company performance in the privatized utilities. Four conclusions regarding the structure of top directors' pay emerge from the analysis. First, the salary plus bonus remuneration of top directors in the privatized utilities has increased by 12 per cent per annum since 1990. Second, average employee pay in these utilities has grown by about 3.1 per cent per annum over the same period. This suggests that top pay growth in the privatized utilities has outstripped that of the average worker since 1990. Third, the analysis cannot isolate a robust statistical relationship between directors' compensation and measures of pre-dated company performance. Finally, directors' share option dealings can sometimes considerably inflate their overall compensation.
Taken together, these findings implicitly question the current efficacy of remuneration committees for determining boardroom pay in the privatized utilities. One solution, which may enable shareholders more accurately to assess executive performance, is for complete disclosure of all components of directors' pay in the company accounts.     

Factors Affecting Perceptions of Smallest Meaningful Pay Increases

This analysis suggests that an individual's current level of earnings may be one of the most important variables influencing his/her perception of incremental increases. Also, job difficulty (measured in terms of the average number of nights spent away from home per month on job-related duties) contributes significantly to the explanation of SMPI for both the organizational recognition group and the monetary considerations group. For the ORG group, the pay increase an individual finds meaningful appears to be influenced as well by job input factors such as total work experience, tenure in present job, tenure with present employer, and age. These results support the hypothesis that individuals with relatively high levels of training and experience and higher current earnings will tend to have higher expectations with regard to salary increases than will others, and that these expectations in turn will be reflected in higher thresholds of what is perceived as the smallest meaningful pay increase. Overall, much of the evidence supports the hypothesis that the predictors of SMPI will be different for the ORG and MCG groups. However, the relatively small size of the MCG sample and the associated problem of multicollinearity dictate caution in generalizing our results.* In addition, our study suffers from problems related to model underspecification, insofar as some of the explanatory variables identified in Lawler's model of pay satisfaction were not considered.     

Pay Secrecy and the Gender Wage Gap in the United States

Legislators and advocates claim that pay secrecy perpetuates the gender wage gap and that the Fair Labor Standards Act (FLSA) should be amended to outlaw these practices. Using a difference‐in‐differences fixed‐effects human‐capital wage regression, I find that women with higher education levels who live in states that have outlawed pay secrecy have higher earnings, and that the wage gap is consequently reduced. State bans on pay secrecy and federal legislation to amend the FLSA to allow workers to share information about their wages may improve the gender wage gap, especially among women with college or graduate degrees.     

Variable Pay and Collective Bargaining in British Retail Banking

The growth of variable pay schemes (VPS) appears to threaten collective approaches to pay determination, which are based on standardization and centralization. This article utilizes case study research to analyse the still little‐known relationship between collective bargaining and VPS. It focuses on the retail banking sector, where trade union representation and collective bargaining remain relatively robust. The research identifies an emergent process whereby the growth of bonus schemes has both supplanted collective profit‐share and permitted greater standardization of merit‐pay awards. Unions have therefore achieved some success in terms of limiting variation in base pay, at the same time as the overall purchase of collective bargaining on employee earnings has diminished. The factors contributing to this development are explained.     

CEO compensation in EU telecom companies: Does the state design the right incentives?

This paper analyzes the structure of CEO pay in European fixed telecommunication companies, focusing on the impact of state ownership. Results show that, under the (partial or total) control of the state, the level of CEO compensation is lower and pay-performance sensitivity is higher than in privately-controlled firms. This finding suggests the state provides an incentive as well as a monitoring effect. However, when the state holds the majority of the shares, the pay level is significantly affected by the CEO power, suggesting that in these firms, CEOs are more likely to be entrenched with boards and succeed in raising their pay.     

Managerial Pay and Governance in American Nonprofits

This article examines the compensation of top managers of nonprofits in the United States using panel data from tax returns of the organizations from 1992 to 1996. Studying managers in nonprofits is particularly interesting given the difficulty in measuring performance. The article examines many areas commonly studied in the executive pay (within for-profit firms) literature. It explores pay differences between for-profit and nonprofit firms,pay variability within and across nonprofit industries, managerial pay and performance (including organization size and fund raising) in nonprofits, the effect of government grants on managerial pay, and the relationship between boards of directors and managerial pay in nonprofits.     

Do Broad‐based Employee Ownership,Profit Sharing and Stock Options Help the Best Firms Do Even Better?

This article analyses the linkages among group incentive methods of compensation (broad‐based employee ownership, profit sharing and stock options), labour practices, worker assessments of workplace culture, turnover and firm performance in firms that applied to the ‘100 Best Companies to Work For in America’ competition from 2005 to 2007. Although employers with good labour practices self‐select into the 100 Best Companies firms sample, which should bias the analysis against finding strong associations among modes of compensation, labour policies and outcomes, we find that employees in the firms that use group incentive pay more extensively participate more in decisions, have greater information sharing, trust supervisors more and report a more positive workplace culture than in other companies. The combination of group incentive pay with policies that empower employees and create a positive workplace culture reduces voluntary turnover and increases employee intent to stay and raises return on equity.     

高管薪酬激励、创业战略导向与创业型企业成长性关系研究

本文基于2012～2014年创业板上市公司的非平衡面板数据,研究了高管薪酬激励与创业型企业成长性之间的关系,探讨了创业战略导向作为企业内部的增长战略倾向对上述关系的调节作用。研究结果表明：高管货币薪酬、权益薪酬、薪酬差距与创业型企业成长显著正相关;创业战略导向会负向调节高管货币薪酬与创业型企业成长性之间的关系、正向调节权益薪酬与创业型企业成长性之间的关系,而对薪酬差距与创业型企业成长之间关系的调节作用未得到验证。     

Institutions and the Management of Human Resources: Incentive Pay Systems in France and Great Britain

Using data from large‐scale establishment surveys in Britain and France, we show that incentive pay for non‐managers is more widespread in France than in Britain. We explain this finding in terms of the ‘beneficial constraint’ arising from stronger employment protection in France, which provides an impulse to develop incentive pay; employer networking activities in France, which facilitate joint learning about its development and operation; and government fiscal incentives for profit‐sharing, which reduce the cost of its operation.     

Decentralization and Pay Reform in Central Government: a Study of Three Countries

Over the past decade central governments of the UK, Sweden and Australia have been engaged in significant reforms in the way they pay their employees. These reforms have generally taken the form of the decentralization of pay bargaining and the individualization of pay. This paper details the policies that have been implemented in central government in these countries and presents some preliminary results on the effects of these. While the actual implementation has varied quite substantially across the countries and the analysis of the outcomes must be regarded as preliminary, there is some evidence that the reforms have led to an increase in earnings dispersion.     

Generating Equality? Equal Pay,Decentralization and the Electricity Supply Industry

Despite the existence of effective equal pay legislation in the UK since 1975 aimed at eradicating pay discrimination, women are still in receipt of only 79.5 per cent of the hourly earnings received by men (EOR 1994b). Whitehouse (1992) claims that a centralized collective bargaining model is more likely to lead to equality for women in the labour market than a liberalized individualistic model. The model was tested at an aggregated level for 13 OECD countries. This article provides a case study which charts a trade union claim for equal pay over a period often years (1984–94), which may be seen as an examination of the Whitehouse proposition at a disaggregated level. The paper highlights the barriers to equality bargaining and analyses the case study to identify the criteria necessary for achieving equality.     

The Gender Pay Gap for Private‐Sector Employees in Canada and Britain

The gender earnings differentials for private‐sector employees in Britain and Canada are similar, substantial and significant. Using linked employer–employee data, we show that women are more likely to be employed in low‐wage workplaces than men in both counties. After accounting for the workplace, women continue to earn less than comparable men. Although men and women face a more equal pay structure within their workplace than they do across workplaces, a substantial portion of the gender pay gap in both countries remains unexplained by the individual characteristics or workplace effects considered in this study.     

Gender Pay Gap,Voluntary Interventions and Recession: The Case of the British Financial Services Sector

State institutions and trade unions put pressure on the British financial services sector to reform its gendered practices and reduce its gender pay gap following both the recession and the Equality and Human Rights Commission (EHRC) Inquiry (2009). This article considers the effect of these pressures by comparing the gender pay gap pre‐, during‐ and post‐recession periods. Using Labour Force Survey data, the article finds a marginal pay gap reduction in the post‐recession period, a reduction that was greater in financial services than in the rest of the economy. However, the financial services pay gap remained resilient and substantially higher at the top of the earnings distribution. Union membership and collective bargaining were shown to reduce the pay gap including for women members with children. In contrast, countervailing factors, including ethnicity and post‐recession longer working hours, contributed to the pay gap. The study reveals the limitations of voluntary interventions against a resilient gendered culture.     

The Disappearing Relationship Between Directors' Pay and Corporate Performance

In this paper we investigate the relationship between the remuneration of the highest paid director and the economic performance of approximately 300 large UK companies over the 1980s and early 1990s. The rate of growth of directors' remuneration was very high over this time period (about 20 per cent per year on average) and very weakly linked to corporate performance. Any such link breaks down after 1988, when the very high pay awards received by top directors in the recessionary period up to 1991 appear to be unrelated to the performance of their companies, whether corporate performance is measured using stock market data or using accounting data on earnings per share. Rather, it appears that corporate growth is an important determinant of the change in directors' remuneration. These results strongly call into question the effectiveness of current systems of pay determination for top company directors.