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Pay Equality and Industrial Politics
Abstract
Personnel managers often argue that equitable pay treatment manifested as wage compression is useful because it reduces disharmony among workers. But it is far from obvious that a compressed salary structure is morale improving since better workers may feel disenchanted by this scheme. However, when workers' rewards are based on relative comparisons, salary compression reduces uncooperative behavior that is detrimental to the firm. Relative comparisons imply that some reference group must be selected. The major result is that within the relevant groups, some wage compression is efficient.
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Citations
Cited by
Multitask principal – agent analyses: Incentive contracts, asset ownership, and job design
Holmstrom, B., & Milgrom, P. (1991) · The Journal of Law, Economics, and Organization · doi:10.1093/jleo/7.special_issue.24 · Cited by 6,046
Firms, Contracts, and Financial Structure
Hart, O. (1995) · doi:10.1093/0198288816.001.0001 · Cited by 4,672
The Provision of Incentives in Firms
Prendergast, C. (1999) · Journal of Economic Literature · doi:10.1257/jel.37.1.7 · Cited by 3,338
Holmstrom, B. (1989) · Journal of Economic Behavior & Organization · doi:10.1016/0167-2681(89)90025-5 · Cited by 1,648
Psychological foundations of incentives
Fehr, E., & Falk, A. (2002) · European Economic Review · doi:10.1016/s0014-2921(01)00208-2 · Cited by 1,240
Metadata
- Authors
- Lazear, E. P.
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 1989-06
- Volume
- 97
- Issue
- 3
- Pages
- 561-580
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- OpenAlex
- W1980603183
- Cited by
- 1,201
- References
- 0
- FWCI
- 57.95
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
