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
Short-term bonuses have become prevalent in the workplace, with companies seeing them as valuable tools in engaging and motivating employees. A study in the high-tech manufacturing sector, examined the role of three types of bonuses (cash, family meal voucher, and verbal reward) in employee performance and absenteeism. All bonus types were found to increase performance and decrease absenteeism rates, although key differences in effects were found across the three types of bonuses.
Key Topics: Non-monetary rewards; Short-term bonuses; Employee performance; Absenteeism
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
Gender pay gaps continue to persist in many countries, despite direct intervention by governments, regulators, and companies alike. So why does this apparent gender pay inequality continue? A recent German study examined some of the underlying mechanisms relating to perceptions of fair pay and found that both men and women held the belief that lower pay for women was fair. These beliefs appear to be formed and ‘legitimized’ based on people’s experiences of pay inequality in their own occupations and experiencing more value placed on the input of men in the workplace.
Key Topics: Gender pay gap; Fair compensation; Performance evaluation; Pay inequality
Given the importance of innovation to many companies, the optimal performance of Research & Development employees can be critical to business success. While past research indicates that there is a strong link between monetary rewards and employee performance, this relationship is less clear when it comes to generating employee innovation. A multi-year study in Japan assessed the effect of rewards on the innovation outcomes of Research & Development employees. The study found that, while the relationship differed depending on company size, generally financial reward had a negative impact on employee innovation.
Key Topics: Innovation; Pay-for-performance; Extrinsic reward; R&D employees