No abstract

Was affirmative action successful in increasing employment opportunities for blacks? In this paper, affirmative action will refer to the provisions of Lyndon Johnson's Executive Order 11246 in 1965, as amended by Richard Nixon's Executive Order 11375 [3 C.F.R. 169 (1974)]. Under Executive Order 11246, federal contractors agree “not to discriminate against any employee or applicant for employment because of race, color, religion, sex, nor national origin, and to take affirmative action to ensure that applicants are employed and employees are treated during employment without regard to their race, color, religion, sex or national origin” [3 C.F.R. 169 202(1) (1974)].

This study examines the effects of executive compensation policy and organizational structure on the performance of 439 large U.S. corporations between 1981 and 1985. Companies with long-term incentive plans enjoyed significantly greater increases in ROE (return on equity) than did companies without such plans, and by 1985 long-term incentive plans had been nearly universally adopted by large corporations. Corporate success was not significantly related to the level of, or degree of equity in, executive pay, or to the steepness of pay differentials across executive ranks; it was, however, positively related to the extent of hierarchical structure, which appears to have been the primary mechanism for sorting individuals by human capital endowments and performance.

Using longitudinal data collected in 1996-98 from over 800 similar workplaces owned and operated by one corporation, the authors examine how workplace diversity and employee isolation along the dimensions of gender, race, and age affected employee turnover. This design controls for much of the variation in job characteristics and labor markets that have confounded other studies of diversity. The authors use the non-linearity of diversity to distinguish its effect from the main effects of demographic groups and from isolation (being in a numerical minority). The study examines how diversity and isolation by race (white, black, Hispanic, Asian), sex, and age affected different groups. The authors find no consistent evidence that diversity itself increased turnover. In contrast, isolation from coworkers and from customers was often associated with higher turnover.