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Session Type: Paper Session
Program Session: 1392 | Submission: 20507 | Sponsor(s): (STR)
Scheduled: Monday, Aug 13 2018 3:00PM - 4:30PM at Swissôtel Chicago in Zurich G
 
(Dis)Incentives: The Outcomes of Pay Inequality and Incentive Pay
(Dis)Incentives & Pay
 

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Chair: Anja Christine Tuschke, Ludwig Maximilian U. of Munich (LMU)
STR: Pay-for-Performance and Employee Mental Health: Evidence Using Employee Prescription Drug Usage
Author: Michael S. Dahl, Aarhus U.
Author: Lamar Pierce, Washington U. in St. Louis
This paper provides the first evidence linking pay-for-performance (P4P) adoption by employers to mental health problems in employees. Linking survey-based data on P4P adoption by 1,309 Danish firms with objective wage, demographic, and medical prescription data of their 318,717 full-time employees, we find a four to six percent increase in the usage of anti-depressant and anti-anxiety after firms adopt P4P. This change does not appear related to decreased wages, and is observed almost exclusively in men and those older than fifty. We find no evidence of increased turnover. Although we cannot claim a causal relationship, collectively our results support prior theoretical arguments that performance- based pay may indeed increase stress in ways necessitating medical treatment.
Paper is No Longer Available Online: Please contact the author(s).
STR: When Does Equity Sharing of Core Employees Incentive Innovation for Small and Medium Enterprises?
Author: Yunshi Mao, National Sun Yat-Sen U.
Author: Jing Wang, National Sun Yat-Sen U.
This paper explores when equity sharing of core employees could better incentive innovation for small and medium high-technology manufacturing enterprises. With the data of 180 small and medium high-technological manufacturing enterprises from China’s Over-the- counter Exchange Market specially for Small Companies with low stock liquidity, which have published equity sharing incentive announcement between the years of 2014-2017, this paper find three interesting results. First, the staff breadth of equity sharing incentive is significantly positive with innovation performance, but the relationship between the share intensity of equity sharing incentive and innovation performance is not significant. Second, the relationship between the staff breadth and share intensity of sharing incentive for core R&D employees and innovation performance is non-linear and is inverted U-type, while the relationship between the staff breadth of sharing incentive for managers and innovation performance is negative. Third, when the largest shareholder has lower equity concentration, and the enterprise has stronger internal check-and-balance power of multiple blockholders, the relationship between the staff breadth of equity sharing incentive and innovation performance is stronger.
Paper is No Longer Available Online: Please contact the author(s).
STR: Pay Inequality and Corporate Divestiture
Author: Emilie Feldman, U. of Pennsylvania
Author: Claudine Madras Gartenberg, The Wharton School, U. of Pennsylvania
This paper analyzes how pay inequality influences corporate divestiture decisions. Using detailed data on division manager compensation and divestiture activity, this study documents that firms are more likely to divest divisions when pay inequality is higher. To address potential bias in the measurement of pay inequality, we construct a “synthetic” measure that varies with regional and industry pay shocks that differentially affect the divisions within firms. Post-hoc analyses reveal that social comparison appears to be a contributing mechanism to the relationship between pay inequality and divestitures. These findings support the notion that pay inequality can be an important predictor of firm boundaries, and suggest more generally that pay inequality may have significant strategic consequences as firms increasingly adopt incentive pay to motivate their employees.
Paper is No Longer Available Online: Please contact the author(s).
STR: The impact of within-firm pay disparity on workplace accidents
Author: Cristian Ramirez, Pontificia U. Católica de Chile
Author: Jorge Tarzijan, Pontificia U. Católica de Chile
Author: Marcos Singer, Pontificia U. Católica de Chile
Based on a detailed and novel database including more than 40,000 firms and more than 2.4 million employees, we analyze the impact of vertical pay disparity on the magnitude of workplace accidents. Greater pay disparity has been associated with higher- powered incentives to compete for better-paid positions, which may increase workers’ willingness to take risks. We find that the number of days lost –as consequence of workplace accidents– is increasing in the level of pay disparity and that this relationship is negatively moderated by the proportion of female employees and by the state-ownership of companies, showing that the willingness to take risks varies by gender and by the incentives implied in different ownership structures. Our results also show that different wage layers respond differently to pay disparity. We highlight the need to consider costs that are usually hidden when analyzing the benefits of different compensation structures and to analyze the effects of these structures at different organizational layers.
Paper is No Longer Available Online: Please contact the author(s).
  
KEY TO SYMBOLS Teaching-oriented Teaching-oriented   Practice-oriented Practice-oriented   International-oriented International-oriented   Theme-oriented Theme-oriented   Research-oriented Research-oriented   Teaching-oriented Diversity-oriented
Selected as a Best Paper Selected as a Best Paper