scholarly journals The Effect of Employee Discretion and Performance Pay on the Productivity

2011 ◽  
Vol null (37) ◽  
pp. 359-392
Author(s):  
Chi, Sung-Kwon ◽  
류수전 ◽  
변설원
Keyword(s):  
Performance Pay ◽  
And Performance

Changing the Education Workforce? The Relationships among Teacher Quality, Motivation, and Performance Pay

2017 ◽  
Vol 119 (4) ◽  
pp. 1-32
Author(s):  
Daniel H. Bowen ◽  
Jonathan N. Mills
Keyword(s):  
Teacher Quality ◽  
Financial Incentives ◽  
Risk Preferences ◽  
Value Added ◽  
Performance Pay ◽  
Teaching Profession ◽  
Performance Based Pay ◽  
Teacher Workforce ◽  
And Performance ◽  
K 12

Background/Context With a growing body of evidence to support the assertion that teacher quality is vital to producing better student outcomes, policymakers continue to seek solutions to attract and retain the best educators. Performance-based pay is a reform that has become popular in K–12 education over the last decade. This strategy potentially produces positive impacts on student achievement in two ways: better alignment of financial incentives with desired outcomes and improved the composition of the teacher workforce. While evaluations have primarily focused on the former result, there is little research on whether the longer-term implementation of these polices can attract more effective teachers. Purpose In this study we aim to provide evidence for potential long-term impacts that performance-based pay can have on the composition of the teacher workforce by addressing two questions: Does performance-based pay attract fundamentally different individuals, as measured by their risk preferences, to the teaching profession? Are stated preferences for a particular pay format correlated to measures of teacher quality? Research Design We apply methods from experimental economics and conduct surveys with 120 teachers from two school districts who have experienced performance pay. We compare the risk preferences of teachers hired under the two pay formats to test the hypothesis that performance-based pay attracts individuals with different characteristics to the profession. We also analyze teachers’ survey responses on their preferences for performance-based pay to determine their relationships to two measures of teacher quality: student test-score gains and principal evaluations. Conclusions/Recommendations We find mixed results regarding the ability of performance-based pay to alter the composition of the teacher workforce. Teachers hired with performance-based pay in place are no different from their colleagues. However, teachers claiming to seek employment in districts with performance-based pay in place appear significantly less risk averse. Surprisingly, additional analyses indicate that teachers’ value-added scores and performance evaluations do not predict a positive disposition towards merit pay. Thus, while these results indicate the possibility for performance-based pay to attract different individuals to teaching, they do not provide evidence that such change would necessarily improve the composition of the workforce. Policymakers should take this potential tradeoff into consideration when considering the expansion of performance pay policies.

On-the-Job Tasks and Performance Pay: A Vacancy-Level Analysis

ILR Review ◽  
2010 ◽  
Vol 63 (3) ◽  
pp. 511-544 ◽  
Author(s):  
Vera Brenčič ◽  
John Brian Norris
Keyword(s):  
Performance Pay ◽  
Job Tasks ◽  
And Performance ◽  
Vacancy Level ◽  
Level Analysis

Workplace Variation in Fatherhood Wage Premiums: Do Formalization and Performance Pay Matter?

2018 ◽  
Vol 32 (4) ◽  
pp. 768-788 ◽  
Author(s):  
Sylvia Fuller ◽  
Lynn Prince Cooke
Keyword(s):  
Wage Inequality ◽  
Organizational Context ◽  
Performance Pay ◽  
Wage Premium ◽  
Incentive Pay ◽  
Family Status ◽  
Pay Systems ◽  
Formal Employment ◽  
And Performance ◽  
Household Labour

Parenthood contributes substantially to broader gender wage inequality. The intensification of gendered divisions of paid and unpaid work after the birth of a child create unequal constraints and expectations such that, all else equal, mothers earn less than childless women, but fathers earn a wage premium. The fatherhood wage premium, however, varies substantially among men. Analyses of linked workplace-employee data from Canada reveal how organizational context conditions educational, occupational and family-status variation in fatherhood premiums. More formal employment relations (collective bargaining and human resource departments) reduce both overall fatherhood premiums and group differences in them, while performance pay systems (merit and incentive pay) have mixed effects. Shifting entrenched gendered divisions of household labour is thus not the only pathway to minimizing fathers’ wage advantage.

Investigating the associations between executive compensation and firm performance

2018 ◽  
Vol 19 (2) ◽  
pp. 245-270 ◽  
Author(s):  
Nader Elsayed ◽  
Hany Elbardan
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Stock Exchange ◽  
Performance Pay ◽  
Simultaneous Equation ◽  
Future Research ◽  
Content Type ◽  
Executive Remuneration ◽  
Study Results ◽  
And Performance

PurposeWhile there have been extensive empirical investigations of pay-performance sensitivity, the perspective of performance-pay has received less attention to date. While executive compensation is sensitive to firm performance, firm performance is also likely to be affected by executive compensation. Adopting multiple theoretical perspectives, the purpose of this paper is to examine whether executive compensation has a greater influence on firm performance or whether the latter has a greater influence on compensation.Design/methodology/approachUsing data from a five-year period (2010-2014) for Financial Times and Stock Exchange 350 companies, the authors employ a set of simultaneous equation modelling to jointly investigate, after accounting for endogeneity problem, the mutual association of executive compensation and firm performance by employing four control variables (board size, non-executive directors, leverage and boardroom ownership).FindingsThe authors find strong evidence for the greater influence of executive compensation on firm performance than the pay-performance framework. This finding supports the tournament theory compared with the agency perspective.Research limitations/implicationsInevitably, there are limitations in a wide-ranging study of this nature that could be addressed in future research. As any empirical study utilising company data, there may be concerns to the effect of survivorship bias and the manner in which companies have reorganised, if there is any, themselves during the period under examination. There are also issues as to missing data, some measures relating to both executive compensation and corporate governance are not provided by the BoardEx database.Practical implicationsThe study results provide evidence that using the tournament perspective by remuneration committees as a guide for determining executive compensation helps in achieving better performance. This helps in developing appropriate mechanisms for setting executive remuneration.Originality/valueThis paper combines an empirical investigation of the frameworks of pay-performance and performance-pay and develops a system of six simultaneous equations to examine the associations between executive compensation and firm performance.

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