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La dispersion salariale stimule-t-elle la performance d'une firme ?

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Author Info

  • Thierry Lallemand
  • Robert Plasman
  • François Rycx

Abstract

Workers are used to compare their wages with those of their co-workers. As a result, it is argued that the dispersion of wages within a firm has a significant impact on the individual workers?productivity and thus on the average firm performance. However, there is no consensus about the sign and shape of the relationship between wage dispersion and firm performance. On the one hand, the ¿tournament¿ models (e.g., Lazear and Rosen, 1981) stress the positive influence of wage inequality within a firm on the workers?effort. These models suggest the implementation of a differentiated prize structure and to award the largest prize to the most productive worker. On the other hand, other theories argue for some degree of wage compression within a firm by emphasising the importance of fairness and cooperation among the workforce (e.g., Akerlof and Yellen, 1990 ; Levine, 1991). The aim of this paper is to provide a critical summary of the literature regarding the interaction between intra-firm wage dispersion and firm performance. Particular attention is devoted to the empirical results that have been obtained for the Belgian economy. "

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Bibliographic Info

Article provided by De Boeck Université in its journal Reflets et perspectives de la vie économique.

Volume (Year): XLIV (2005)
Issue (Month): 2 ()
Pages: 63-70

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Handle: RePEc:cai:rpvedb:rpve_442_0063

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Web page: http://www.cairn.info/revue-reflets-et-perspectives-de-la-vie-economique.htm

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Keywords: Belgium; wage dispersion; firm performance; personnel economics;

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References

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  1. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
  2. Levine, David, 1989. "Cohesiveness, Productivity, and Wage Dispersion," Institute for Research on Labor and Employment, Working Paper Series qt8kd4d0p4, Institute of Industrial Relations, UC Berkeley.
  3. Main, Brian G M & O'Reilly, Charles A, III & Wade, James, 1993. "Top Executive Pay: Tournament or Teamwork?," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 606-28, October.
  4. Heyman, Fredrik, 2002. "Pay Inequality and Firm Performance: Evidence from Matched Employer-Employee Data," Working Paper Series 186, Trade Union Institute for Economic Research.
  5. Bingley, P. & Eriksson, T, 2001. "Pay Spread and Skewness. Employee Effort and Firm Productivity," Papers 01-2, Aarhus School of Business - Department of Economics.
  6. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  7. Donald Richards & Robert Guell, 1998. "Baseball success and the structure of salaries," Applied Economics Letters, Taylor & Francis Journals, vol. 5(5), pages 291-296.
  8. Thierry Lallemand & Robert Plasman & François Rycx, 2009. "Wage structure and firm productivity in Belgium," ULB Institutional Repository 2013/8733, ULB -- Universite Libre de Bruxelles.
  9. Thierry Lallemand & Robert Plasman & François Rycx, 2003. "Intra-firm wage dispersion and fîrm performance: a review and empirical tests on Belgian data," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 46(4), pages 5-30.
  10. Eriksson, Tor, 1999. "Executive Compensation and Tournament Theory: Empirical Tests on Danish Data," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 262-80, April.
  11. Hibbs, Douglas A, Jr & Locking, Hakan, 2000. "Wage Dispersion and Productive Efficiency: Evidence for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 755-82, October.
  12. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
  13. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
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