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Organizational governance and trade-offs between pay and subjective employee well-being: a comparative analysis

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  • Budd, John W.
  • Lamare, J Ryan

Abstract

The incompleteness of labour contracts is expected to cause uncertainty among forward-looking employees as to whether implicit contracts with greater intrinsic rewards in lieu of pay will be breached by employers, thus reducing employee well-being. David Marsden theorized that an organization's form of governance can serve as a stable, easy-to-observe signal of the likelihood of a breach, and thus employees across governance types will exhibit different extrinsic–intrinsic trade-offs. Using the European Working Conditions Survey, we extend Marsden's theory and find supportive evidence across 35 European countries and 9 governance categories. We also extend Marsden's theorizing into the comparative domain and analyse patterns of subjective well-being, compensatory pay and organizational governance across varieties of political economies.

Suggested Citation

  • Budd, John W. & Lamare, J Ryan, 2025. "Organizational governance and trade-offs between pay and subjective employee well-being: a comparative analysis," LSE Research Online Documents on Economics 126118, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:126118
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    File URL: https://researchonline.lse.ac.uk/id/eprint/126118/
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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