Choosing Whether to Lead, Lag, or Match the Market

This paper demonstrates how cost-benefit analysis can be used to develop a company\u27s pay strategy. Using the case of Punk\u27s Backyard Grill, a new venture starting in the Washington, DC area, quantitative aspects of Utility Analysis are combined with the judgments of the company\u27s owners to provide estimates of the value associated with seven pay strategies. Results showed that leading the market by 5% produced the greatest return. Sensitivity analysis is used to see how drastically estimates changes owing to the nature of the paper\u27s estimates. This methods presented in this paper should help others making pay policy decisions use cost-benefit analysis as part of their decision process

THE MEDIATING ROLE OF PROCEDURAL JUSTICE IN RESPONSES TO PROMOTION DECISIONS

ABSTRACT This study used structural equations modeling to examine the mediating role of procedural justice in the relationships between promotion decisions and organizational commitment and between promotion decisions and intent to leave the organization. 156 managers and executives in Italian subsidiaries of two large multinational organizations in the chemical industry were surveyed about their career history within the organization and their reactions to promotion decisions over an 8-year period. The results showed that promotion decisions influenced feelings of organizational commitment through perceptions of procedural justice in promotion decision-making processes. The theoretical and practical implications of the study s findings are discussed. Keyword procedural justice- promotion decisions- career