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Does High Involvement Management Lead to Higher Pay?

Author

Listed:
  • Petri Böckerman

    (Labour Institute for Economic Research and School of Management, University of Tampere)

  • Alex Bryson

    (National Institute of Economic and Social Research and CEP, London)

  • Pekka Ilmakunnas

    (Aalto University School of Economics, Helsinki)

Abstract

Using nationally representative survey data for Finnish employees linked to register data on their wages and work histories we find wage effects of high involvement management (HIM) practices are generally positive and significant. However, employees with better wage and work histories are more likely to enter HIM jobs. The wage premium falls substantially having accounted for employees' work histories suggesting that existing studies' estimates are upwardly biased due to positive selection into HIM. Results using standard regression techniques are robust to propensity score matching and instrumental variables estimation. The premium also rises with the number of HIM practices and differs markedly across different types of HIM practice.

Suggested Citation

  • Petri Böckerman & Alex Bryson & Pekka Ilmakunnas, 2012. "Does High Involvement Management Lead to Higher Pay?," Working Papers 1285, Tampere University, Faculty of Management and Business, Economics.
    • Handle: RePEc:tam:wpaper:1285
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    File URL: http://urn.fi/urn:isbn:978-951-44-8715-6
    File Function: First version, 2012
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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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