Changes in managerial pay structures 1986-1992 and rising returns to skill

O’Shaughnessy, K. C.

doi:10.1093/oep/53.3.482

Cited by 18 publications

(5 citation statements)

References 17 publications

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“…First, horizontal compression occurs when those in the same job receive relatively equal pay even if what they contribute varies. Job evaluation systems have been shown to create only modest wage variation among employees doing the same job (O'Shaughnessy, Levine, and Cappelli, 2001). Second, vertical compression occurs when pay differentials across jobs are flattened, despite the varying contributions to organizational output associated with those positions.…”

Section: Social Comparison and Wage Compression In Firmsmentioning

confidence: 99%

These Unequal States: Corporate Organization and Income Inequality in the United States

Cobb

Stevens

2016

Administrative Science Quarterly

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In an analysis of data on employment in the 48 contiguous United States from 1978 to 2008, we examine the connection between organizational demography and rising income inequality at the state level. Drawing on research on social comparisons and firm boundaries, we argue that large firms are susceptible to their employees making social comparisons about wages and that firms undertake strategies, such as wage compression, to help ameliorate their damaging effects. We argue that wage compression affects the distribution of wages throughout the broader labor market and that, consequently, state levels of income inequality will increase as fewer individuals in a state are employed by large firms. We hypothesize that the negative relationship between large-firm employment and income inequality will weaken when large employers are more racially diverse and their workers are dispersed across a greater number of establishments. Our results show that as the number of workers in a state employed by large firms declines, income inequality in that state increases. When these firms are more racially diverse, however, the negative relationship between large-firm employment and income inequality weakens. These results point to the importance of considering how corporate demography influences the dispersion of wages in a labor market.

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Section: Social Comparison and Wage Compression In Firmsmentioning

confidence: 99%

These Unequal States: Corporate Organization and Income Inequality in the United States

Cobb

Stevens

2016

Administrative Science Quarterly

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“…However, in today's knowledge economy with its emphasis on continuous learning, these kinds of indicators are no longer sufficient for measuring or predicting career success. For instance, Allen and van der Velden (2001), Green (1998), Green et al (2001), Heijke and Ramaekers (1998), Heijke et al (1998), McIntosh and Vignoles (2001), O'Shaughnessy et al (2001) and Stasz (2001) have done research into the labour market value of particular work competences, which can be seen as a more accurate and reliable way for estimating individual labour market capacities.…”

Section: Introductionmentioning

confidence: 99%

An investigation into the role of human capital competences and their pay‐off

Heijke

Meng

Ramaekers

2003

International Journal of Manpower

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In this paper, the role of three different types of competences in the labour market for higher education graduates is investigated. The article distinguishes discipline‐specific competences, general academic competences and management competences, the first being an example of competences acquired at school, which are of direct use in the labour market, the second being a type of competences also acquired in school, but which fulfil an indirect role by facilitating the acquisition of new competences after graduation from school, and the third, management competences, being an example of competences acquired mainly in a working context and, like discipline‐specific competences, being of direct use in that context. This paper shows that, first, the level of discipline‐specific competences obtained in higher education offers a comparative advantage for graduates working inside the own discipline‐specific domain, and therefore has a pay‐off for those graduates who are able to find a job in this domain; second, the management competences are valued in the labour market but seem to be more likely acquired in a working context than in higher education, and third, the general academic competences acquired in higher education do not pay off directly, but have a significant supportive role when learning competences that have a direct pay‐off in the labour market, like management competences, but are more likely acquired outside education.

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“…Our results also indicate that job demands are not a surrogate for human capital; the correlations between features of the individual and demands of the job are small. This mirrors O'Shaughnessy, Levine, and Cappelli (2001), who study more than 50,000 managerial and professional jobs. They also use Hay points to measure job design and find (p. 20) that Hay points offer “a far more complete measure of skill and job requirements than those used in the past to explain wage outcomes.”…”

Section: Discussion and Managerial Implicationsmentioning

confidence: 88%

“…Consequently, multicollinearity is not an issue in our data (Belsey,Kuh,and Welsch 5 Although Hay points are designed to assess job requirements across firms, the associated compensation may not be aligned to those requirements. For example, O'Shaughnessy, Levine, and Cappelli (2001) surmise that some firms, to ensure above-average performance, may overpay to attract and retain more qualified employees than the jobs require. We thank the anonymous reviewers for pointing out this issue.…”

Section: Model Development and Estimationmentioning

confidence: 99%

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Determinants of Pay Levels and Structures in Sales Organizations

Rouziès

Coughlan

Anderson

et al. 2009

Journal of Marketing

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International audienceTwo key issues in business-to-business (B2B) sales force management are (1) how much a given sales job should be compensated (pay level) and (2) how much of the compensation should be fixed versus variable (pay structure). The authors examine the paychecks drawn by people in more than 14,000 selling jobs and more than 4000 sales management jobs in five B2B industry sectors in five European countries. They show that pay levels and structures reflect an apparent balancing of two conflicting pressures: the economic imperative (to reward better performers by heightening pay dispersion) and the compensation differential compression resulting from high tax regimes. In particular, B2B firms appear to use variable pay as a way to lessen the salary differential compression impact of high tax regimes on salesperson motivation. Furthermore, similar to chief executive officers, sales managers can have an important multiplier effect that justifies paying them at increasing rates as job challenge rises

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Changes in managerial pay structures 1986-1992 and rising returns to skill

Cited by 18 publications

References 17 publications

These Unequal States: Corporate Organization and Income Inequality in the United States

These Unequal States: Corporate Organization and Income Inequality in the United States

An investigation into the role of human capital competences and their pay‐off

Determinants of Pay Levels and Structures in Sales Organizations

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