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Internal wage dispersion and firm performance: white-collar evidence

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Author Info

  • Arngrim Hunnes

Abstract

Purpose – The purpose of this paper is to investigate the net relationship between internal wage dispersion and firm performance. Design/methodology/approach – An empirical investigation of the relationship between internal wage dispersion and firm performance is performed using linked employer-employee data for Norwegian firms from 1986 to 1997. Findings – Contrary to findings in previous empirical work of a positive relationship between internal wage dispersion and firm performance, the analysis finds no such evidence in Norwegian firms, even though internal wage dispersion has increased. Originality/value – The paper contributes to the relatively sparse empirical literature on internal wage dispersion and firm performance. Further, the analysis provides a new econometric specification for estimating internal wage dispersion that explicitly takes into account the hierarchical organization of firms. In contrast with previous work, the analysis also distinguishes between dispersion in both the fixed and variable portions of wages.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 30 (2009)
Issue (Month): 8 (November)
Pages: 776-796

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Handle: RePEc:eme:ijmpps:v:30:y:2009:i:8:p:776-796

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Related research

Keywords: Bonuses; Company performance; Norway; Pay; White collar workers;

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Cited by:
  1. Simon Gaechter & Daniele Nosenzo & Martin Sefton, 2010. "The Impact of Social Camparisons of Reciprocity," Discussion Papers 2010-10, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Benoît Mahy & François Rycx & Mélanie Volral, 2011. "Does Wage Dispersion Make All Firms Productive?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(4), pages 455-489, 09.

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