Compensation Policy and Organizational Performance: The Efficiency, Operational, and Financial Implications of Pay Levels and Pay Structure

Pay Dispersion and Organizational Performance in Korea: Curvilinearity and the Moderating Role of Congruence with Organizational Culture

“…Brown et al (2003) were the first to suggest the possibility of curvilinearity, but they did not support their hypothesis. Other studies showed significant empirical findings, but the results are needed to test much broader sampling because they conducted the specialized samples such as the manager and senior manager levels (Yang & Klaas, 2011) and sport team data (Trevor, Reilly, & Gerhart, 2012).…”

“…Compared to pay differences within the same types of jobs, the pay gap distributed across the organizational hierarchy indicates how much a firm emphasizes final outcomes and competitiveness (Gerhart & Rynes, 2003;Milkovich et al, 2011). Since the impact of this signaling is greater in vertical rather than in horizontal pay dispersion, previous studies on the pay dispersionorganizational outcomes relationship have been conducted using the degree of pay distribution across an organizational hierarchy (Bloom, 1999;Brown et al, 2003;Cowherd & Levine, 1992;Grund & Westergaard-Nielsen, 2008;Shaw et al, 2002). Following them, this paper will also focus on intra-firm pay dispersion to investigate its effect on firm performance.…”

“…To reconcile the conflicting conclusions about pay dispersion and organizational performance, compensation researchers have suggested the possibility of curvilinearity (Brown, Sturman, & Simmering, 2003;Yang & Klaas, 2011) or investigated contextual factors (Bloom & Michel, 2002;Shaw et al, 2002). Although these studies expand our understanding, we revisit the pay dispersion-organizational performance relationship in this paper for two reasons.…”

Competitiveness, resources, and capabilities: empirical evidence from retail banking

“…Thus, Guthridge et al (2008) and Quinn et al (1996) both argue that organizations should be able to attract qualified employees, manage the professional intellect and transform productive knowledge (intellectual capital) into added value to the customer. These HR management practices influence the intensity of motivation through the adoption of performance assessments, pay-for-performance incentives and merit based internal promotions systems (Brown et al 2003) and can also influence the design of work so that highly motivated and skilled employees best apply what they know in performing their jobs (Wright and Boswell 2002).…”

Evolutionary perspectives on salary dispersion within firms

“…Salary dispersion is measured 'vertically' from high-ranking to low-ranking positions and 'horizontally' across individuals sharing comparable positions (Shaw et al 2002). Vertical distances that have been studied include the CEO to Vice Presidents or Top Management Team (Conyon et al 2001;Henderson and Fredrickson 2001;Carpenter and Sanders 2004), top managerial levels to low-ranked employees (Cowherd and Levine 1992;Brown et al 2003;Lallemand et al 2004), and managers to unionized, subordinate employees (Colvin et al 2001). Horizontal distances have been studied among workers across a wide range of industries including teammates on professional sporting teams (Bloom 1999;Depken 2000;Frick et al 2003;Jewell and Molina 2004) since their payroll and performance data tend to be uniquely transparent.…”