Promotion Tournaments and Individual Performance Pay

We analyze the optimal combination of promotion tournaments and linear individual performance pay in an employment relationship. An agent's effort is nonobservable and he has private information about his suitability for promotion. Thus, the two incentive schemes need to be combined to serve both incentive and selection purposes. If harder working agents respond less to intensified effort incentives, we find that the principal puts less emphasis on individual performance pay when selection becomes more important. Thus, we provide a possible explanation as to why, in practice, individual performance pay is less prevalent than promotion‐based incentives.     

The Rise of Individual Performance Pay

Existing empirical evidence suggests that individual performance pay is more prevalent in human‐capital‐intensive industries. We introduce a model that can contribute to explain this. In a repeated game model of relational contracting, we analyze the conditions for implementing peer‐dependent incentive regimes when agents possess indispensable human capital. We show that the larger the share of values that the agents can hold up, the lower is the implementable degree of peer‐dependent incentives. In a setting with complementary tasks, we show that although team‐based incentives are optimal if agents are dispensable, it may be costly, and, in fact, suboptimal, to provide team incentives when the agents become indispensable.     

Innovation Offshoring,Institutional Context and Innovation Performance: A Meta‐Analysis

Innovation offshoring (IO) has become a widespread management practice. Yet, evidence on the performance implications is inconsistent, and scattered across disciplines and contexts. We argue that the benefits firms can derive from IO depend on the institutional environment at home. Drawing on recent work on institutional theory in international business, we explore institutions that facilitate reverse knowledge transfer and/or institutional arbitrage with respect to innovation‐related activities. The results of our meta‐analysis that synthesizes evidence from 48 samples show that IO is related positively to innovation performance. As predicted, this relationship is moderated by differences in the institutional environments across countries. Specifically, when national innovation systems are weak at home, IO appears to enable institutional arbitrage strategy whereas Confucian cultures enable more effective reverse knowledge transfer. However, contrary to our expectations, the beneficial effects of IO appear to have diminished over time.     

Offshoring,globalization, and welfare

We investigate the issue of offshoring in a general-equilibrium model of two countries and one sector of increasing returns to scale. Our model uncovers that offshoring occurs and endogenously evolves in a bell-shaped pattern when trade costs decline, explaining some stylized facts in developed countries. Furthermore, this simple framework can be applied to examine the welfare issue. We find that a fall in offshoring costs benefits the high-wage country but hurts the low-wage country. On the other hand, the low-wage country benefits with trade liberalization. The impact of falling trade costs on the welfare of the high-wage country depends on the values of offshoring freeness.     

浅谈绩效考核在绩效薪酬分配中的作用

本文主要就分析了绩效考核在绩效薪酬分配中的作用。     

Re-Evaluating the Offshoring Decision: A Behavioural Approach to the Role of Performance Discrepancy

Firms are in a continuous process of critically re-evaluating their offshoring strategies due to performance discrepancies. While prior research has focused on the implementation of organizational responses to performance shortfalls, we examine the offline search process, a key antecedent of organizational change, during which firms simultaneously explore alternative solutions when facing either a positive or a negative discrepancy between performance and aspirations. We adopt the Behavioural Theory of the Firm (BTOF) to investigate how the search process is affected by the size and nature (as being positive or negative) of the discrepancy as well as how it is moderated by cognitive biases. By examining 441 offshoring initiatives, we study firms' search processes in a novel context that refers either to ‘local’ solutions that are close to the current activity (i.e., expansion in the same host country) or ‘distant’ solutions that are far from the current one (i.e., relocation to a third country or to the home country). Our results provide new insights into organizational search, namely that performance shortfalls lead to distant search unless this choice is moderated by a location-specific anchor bias relating to the strategic importance of host location, while positive discrepancies trigger local search with decision-makers more inclined to consider expansion in the current host country.     

我国承接外包与能源消耗、碳排放的动态关联性分析

本文构建（进口）非竞争型12部门投入产出模型,并运用动态面板GMM建模技术,从不同层面、不同维度（总量和强度）探讨1991～2010年我国主要行业能源消耗、碳排放与各类特征的承接外包间的动态关联性。研究发现,承接国外中间生产环节的外包业务是我国出口贸易中引致能源消耗和碳排放快速增长的最主要拉动力量,加工品、基本材料是引致碳排放过度的最主要生产环节,零配件承接易导致能源总量的过度消耗。     

Long Term Incentive Plans,Executive Pay and UK Company Performance*

ABSTRACT In agency theory, the remuneration packages of executive directors in large companies are seen as an attempt to give them a pattern of rewards that aligns their interests more closely with shareholders as a whole. The sensitivity of total executive rewards to share price performance has become the conventional yardstick for judgements concerning whether reward packages do indeed serve shareholders’ interests or executives themselves. Long‐term incentive plans (LTIPs) introduced in the UK from 1995 have imposed new, firm‐specific performance conditions on senior managers. While LTIPs are designed to increase performance‐pay sensitivity, however, they also give executives new opportunities to manipulate the terms of LTIPs in their own favour, at the expense of shareholders and stakeholders in general. This paper presents the first estimates of UK total executive rewards that include detailed LTIP valuations. It finds that, while increasing average total rewards, the presence of LTIPs is actually associated with reductions in the sensitivity of executives’ total rewards to shareholder return. This raises doubts concerning both the effectiveness of the LTIP instrument and the validity of an agency perspective in this context.     

推行绩效工资的体会探讨

推行绩效工资是事业单位建立岗位绩效管理的基础。本文主要阐述了推行绩效工资的思路、做法和体会,对实施绩效管理,建立绩效考核机制以及完善绩效工资管理制度进行了探讨。     

Offshoring and backshoring: A multiple case study analysis

Motivations underscoring offshoring and backshoring are typically investigated as separate entities in the academic literature. This separation undermines a deeper comprehension of the two phenomena, and implicitly denies the conceptualization of backshoring as a possible step of the firm internationalization process. Our paper seeks to fill this gap by (1) understanding the relations (if any) among offshoring and backshoring motivations at firm level; (2) exploring whether backshoring is a “failure” of the offshoring initiative, or rather the evolution of the firm's competitive and location strategies. A content-based literature review provides the base for the identification of the key motives for offshoring and backshoring, which are then organised using a theory-grounded framework. Next, we conduct a multiple case study analysis based on four companies, searching for common patterns in offshoring and subsequent backshoring initiatives. Cases allow understanding how the motivations (Why) connect with the governance modes (How), and the location choice (Where). Building on the case findings, the paper presents some propositions for future empirical research.     

Offshoring: Value Creation through Economic Change

abstract    In this essay, I analyse the economic and managerial dimensions of offshoring, drawing from recent research by the McKinsey Global Institute. I argue that offshoring, like other forms of trade, creates enormous value for both companies and the economy as a whole. However, in the case of countries with less flexible labour markets such as Germany, findings are more nuanced. While the potential cost savings for companies from offshoring appear impressive, our research suggests that companies are leaving billions of dollars behind when they offshore. We propose several ways companies could make capital-labour trade-offs to create new markets and services. By maximizing gains from offshoring, companies can both cut costs and generate revenue. Given the benefits offshoring, the challenge is how to make the transition to a global economy less painful for workers and increase the participation in the wealth creation. Hence, I also identify options to help policymakers and companies manage the changes offshoring requires.     

Performance Pay,Union Bargaining and Within‐Firm Wage Inequality*

Theory predicts that performance pay boosts wage dispersion. Workers retain a share of individual productivity shocks and high‐efficiency workers receive compensation for greater effort. Collective bargaining can mitigate the effect of performance pay on wage inequality by easing monitoring of common effort standards and group‐based pay schemes. Analyses of longitudinal employer–employee data show that the introduction of performance‐related pay raises wage inequality in non‐union firms, but not in firms with high union density. Although performance‐related pay appears to be on the rise, the overall impact on wage dispersion is likely to be small, particularly in European countries with influential unions.     

Offshoring in the New Global Political Economy

abstract    This essay challenges claims by economists and management scholars that 'offshoring' is simply another form of trade with mutual benefits. I argue that reducing wages through offshoring leads to wealth creation for shareholders but not necessarily for countries and employees, and that many displaced workers have difficulty 'trading up' to higher skilled jobs. Offshoring is a new phenomenon that entails the organizational and technological ability to relocate specific tasks and coordinate a geographically dispersed network of activities. It decouples the linkages between economic value creation and geographic location. The result is the creation of global commodity markets for particular skills and a shift in the balance of market power among firms, workers, and countries.     

Service Offshoring and the Skill Composition of Labour Demand*

This article studies the effects of service offshoring on the skill composition of labour demand, using novel comparable data for nine Western European countries between 1990 and 2004. The results show that service offshoring raises the relative demand for high‐ and medium‐skilled workers. Its effects are qualitatively identical, and quantitatively similar, to those of material offshoring. Additional evidence suggests, however, that the two types of offshoring may work through different channels: complementarity between imported services and domestic skills in the case of service offshoring, substitution of low‐skilled labour in the case of material offshoring. Overall, the effects are not large in economic terms.     

Incentive Pay and Firm Performance: Moderating Roles of Procedural Justice Climate and Environmental Turbulence

In connection with the literature on strategic reward and agency theory, this study investigates the effects of incentive pay on employee outcomes and firm performance. We identify employee outcomes, such as commitment and competence, as mediating processes that explain the effects of incentive pay on firm performance. We further propose procedural justice climate and environmental turbulence as boundary conditions that determine the strength of the effects of incentive pay on employee outcomes. The research model is tested using multisource data collected at three time points over a five‐year period from 227 Korean companies. Our analysis confirmed that incentive pay enhanced employee commitment and competence, which, in turn, improved the operational and financial performances of firms. The effect of incentive pay on employee commitment was negative for firms with a low procedural justice climate, but positive for firms operated under a highly turbulent environment. By contrast, the effect of incentive pay on employee competence was positive only for firms operated under a stable environment. This study enriches the literature by presenting and validating plausible underlying mechanisms and boundary conditions under which strategic performance–contingent incentive pay affects firm performance. © 2015 Wiley Periodicals, Inc.     

基于绩效工资改革下高职院校绩效考核评价体系探索

本文就高职院校绩效考核现状及存在的问题进行了剖析,提出了相应的绩效考核评价体系,健全了绩效考核反馈机制。以国家骨干高职院校深圳信息职业技术学院专任教师为例,把企业专家和一线技术工程人员纳入绩效考核的主体设计中并建立了绩效考核模型及绩效考核反馈机制流程,使绩效考核真正能调动教职工主动性并激发其潜能,增强高职院校的办学活力和竞争力。     

Offshoring: Dimensions and diffusion of a new business concept

In order to leverage global cost differentials, companies are increasingly turning to offshoring. Nevertheless, discussions in research and practice on offshoring are characterized by the lack of a common definition as well as a theoretically grounded explanation for this phenomenon. This article presents an explicit definition in order to provide a stringent understanding of the term offshoring along the dimensions of contractual/legal arrangement and geographic location. Further, the driving forces of offshoring are analysed on the environmental and company levels. The article closes with a discussion of managerial implications and an outlook on aspects for further research.     

Executive Pay Matters: Looking Beyond the CEO to Explore Implications of Pay Disparity on Non‐CEO Executive Turnover and Firm Performance

Using a longitudinal data set covering a span of 10 years, we investigate the impact of vertical and horizontal pay disparity on non‐CEO executive turnover and subsequent firm performance. Hypothesizing differential responses to pay disparity depending on a non‐CEO executive's responsibilities, we first categorize non‐CEO executives based on their job demands and their role in the organization (e.g., oversight, divisional). We then explore how pay disparity influences the relationship between executive category and turnover, and how the level of pay disparity impacts the relationship between turnover and firm performance. We find that executive category significantly impacts the likelihood of turnover, and also influences firm performance. Theoretical and practical implications are discussed. © 2015 Wiley Periodicals, Inc.