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

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  • 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

Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/7846.

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Date of creation: 2005
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Publication status: Published in: Reflets et Perspectives de la Vie Economique (2005) v.XLIV n° 2,p.63-70
Handle: RePEc:ulb:ulbeco:2013/7846

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Web page: http://difusion.ulb.ac.be
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  1. 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.
  2. Jonathan S. Leonard, 1990. "Executive pay and firm performance," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(3), pages 13-29, February.
  3. 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.
  4. Milgrom, Paul R., 1987. "employment contracts, influence activities and efficient organization design," Department of Economics, Working Paper Series qt6pf6c5j6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. 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.
  6. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
  7. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
  8. DepkenII, Craig A., 2000. "Wage disparity and team productivity: evidence from major league baseball," Economics Letters, Elsevier, vol. 67(1), pages 87-92, April.
  9. 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.
  10. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
  11. Thierry Lallemand & Robert Plasman & François Rycx, 2009. "Wage structure and firm productivity in Belgium," ULB Institutional Repository 2013/8733, ULB -- Universite Libre de Bruxelles.
  12. Fredrik Heyman, 2005. "Pay inequality and firm performance: evidence from matched employer-employee data," Applied Economics, Taylor & Francis Journals, vol. 37(11), pages 1313-1327.
  13. Bingley, Paul & Eriksson, Tor, 2001. "Pay Spread and Skewness, Employee Effort and Firm Productivity," Working Papers 01-2, University of Aarhus, Aarhus School of Business, Department of Economics.
  14. Donald Richards & Robert Guell, 1998. "Baseball success and the structure of salaries," Applied Economics Letters, Taylor & Francis Journals, vol. 5(5), pages 291-296.
  15. 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.
  16. 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.
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