Does employee compensation level influence their future treatment by organizations? A recent study examining players in the NFL sought to understand if players in which organizations had made a greater financial commitment received preferential treatment through more game time. The results indicated that higher compensated players did receive more game time but were no more productive on the field that than their lower compensated colleagues, suggesting that their additional game time was related to bias due to the investment the team had made in them.
Key Topics: Compensation bias; Employee performance
Effectively managing employee turnover is a primary concern for many companies, as they try to retain their most talented employees. Effective turnover management can be particularly important when it comes to the CEO’s top team, as their departure can often have a significant impact on overall company performance. A study of Standard & Poor’s 500 companies from 1994 to 2008 examined the impact of pay dispersion, pay disparity, and pay level relative to the market on executive turnover, and found that not only did these factors significantly impact turnover but that they interacted in interesting ways to increase or decrease turnover levels.
Key Topics: Executive compensation; Benchmarking; Pay disparity; Pay dispersion; Turnover
As companies continue to strive to fill jobs with the best talent, their search often ends with hiring candidates sourced from outside of the company. A 5-year study of executives at US hi-tech manufacturing companies examined the role that the external labour market plays in gender pay differences. While female executives were found to have higher compensation than comparable men, the results indicate that women hired externally receive less than those hired internally, and as such may be disadvantaged by the external labour market.
Key Topics: Gender pay gap; External labour market; Executive compensation; Promotions; External recruitment
Will Employees Be Satisfied With More Flexible Benefits? It Could Depend On Their Personality
Companies are increasingly moving to more flexible employee benefits systems and giving employees more control over their benefits, based on the assumption that this will result in greater employee satisfaction with benefits. But is this assumption unfounded? A study of Spanish employees examined the role of personality traits in the relationship between benefits flexibility and benefits satisfaction. The results indicated that personality traits, particularly self-efficacy and internal locus of control, moderated the relationship between benefit flexibility and benefit satisfaction.
Key Topics: Flexible benefits; Benefit satisfaction; Personality traits; Self-efficacy; Internal locus of control
The prevalence of employee ownership in companies has been on the rise in recent years, with companies increasingly using long term incentives and employee stock ownership plans in the belief that it will increase company performance. A comprehensive study across 14 countries looked to examine the validity of this apparent positive link between employee ownership and company performance. The results did indeed find a significant relationship between these two factors, and this positive relationship held across both publicly and privately held companies.
Key Topics: Employee ownership; Long term incentives; Company performance
With the competitive landscape becoming increasingly difficult, companies are looking for ways to optimize employee effort and performance. One mechanism used by many companies is pay-for-performance, linking compensation directly to performance. A Norwegian study investigated the role of base pay and variable pay-for-performance plans in the Insurance industry over a 2-year period, and found that such compensation plans can lead to increased effort and deceased turnover intentions, but via employee job motivation.
Key Topics: Pay-for-performance; Employee motivation; Employee effort; Turnover intention
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