Do Higher Wages Pay for Themselves? An Intra-firm Test of the Effect of Wages on Employee Performance

Conference: AAA 2015 Management Accounting Section (MAS) Meeting, AAA 2015 Annual meeting, Volume: http://ssrn.com/abstract=2482829This study uses field data from 490 hotels in a single lodging chain to investigate three questions related to the efficiency-wage hypothesis. (1) Does paying workers higher relative wages ex ante result in better ex post actual performance, either by motivating workers to exert greater effort or by attracting higher quality workers? (2) Is the magnitude of the relation between performance and wages the same when workers are overpaid versus underpaid? (3) Do the overall benefits of paying higher wages outweigh the costs? The data enable us to perform powerful tests of wageperformance relations because exogenous factors that likely affect employee behavior are standardized across hotels. Our results suggest that actual performance (measured by customer satisfaction, revenues, and profit) is increasing in the relative wage, and that higher performance is the result, and not the cause, of higher wages. We find that the magnitude of the wageperformance relation is at least as large for workers who are overpaid compared to those who are underpaid. This result, which differs from the results of experimental studies, suggests that overpaid workers do not rationalize away wage premiums. Finally, our results indicate that increases in wages do, in fact, pay for themselves. A $1,000 increase in the general manager’s relative wage results in a$1,080 increase in profit for the mean hotel. This research contributes to a series of studies that investigates the extent to which wages influence performance (e.g., Levine, 1992; Fehr and Falk, 1999; Hannan, Kagal, and Moser, 2002; Hannan, 2005), and whether the marginal benefit of wage increases justifies their costs (Levin, 1993)

Financial consequences of competitive set choice

This study examines the financial consequences of competitive set choice using a sample of 312 hotels in a major metropolitan area in the United States. We document existence of asymmetric competitor monitoring, finding just 55% of monitoring is reciprocal; that is, about half of managers “agree,” by virtue of monitoring one another, on being direct competitors. Monitoring reciprocity is positively associated with performance through average daily rates. With total revenue unchanged, profits are higher through lower occupancy and lower total costs. We examine alternative competitive sets formed using strategic groups- and customer-based approaches, comparing these to actual compsets. We found that performance declines when managers deviate from these alternative sets. Post-hoc analyses provide insight on how overlapping compsets impact rates, occupancy and revenue. Our study is of value to academics and practitioners, providing evidence on the financial impact of competitive monitoring, and insights for managers who choose competitive sets

The effect of frailty on survival in patients with COVID-19 (COPE) : a multicentre, European, observational cohort study

Peer reviewedPublisher PD

Routine Use of Immunosuppressants is Associated with Mortality in Hospitalised Patients with Covid-19

Acknowledgement We acknowledge the dedication, commitment, and sacrifice of the staff from participating centres across UK and Italy, two among the most severely affected countries in Europe. We gratefully acknowledge the contribution of our collaborators, National Institute of Health Research (NIHR), Health Research Authority (HRA) in the UK and Ethics Committee of Policlinico Hospital Modena, which provided rapid approval of COPE study and respective Institutions’ Research and Development Offices and Caldicott Guardians for their assistance and guidance. We also thank COPE Study Sponsor, Cardiff University, Wales, UK.Peer reviewedPublisher PD

The effect of frailty on survival in patients with COVID-19 (COPE): a multicentre, European, observational cohort study

Background The COVID-19 pandemic has placed unprecedented strain on health-care systems. Frailty is being used in clinical decision making for patients with COVID-19, yet the prevalence and effect of frailty in people with COVID-19 is not known. In the COVID-19 in Older PEople (COPE) study we aimed to establish the prevalence of frailty in patients with COVID-19 who were admitted to hospital and investigate its association with mortality and duration of hospital stay. Methods This was an observational cohort study conducted at ten hospitals in the UK and one in Italy. All adults (≥18 years) admitted to participating hospitals with COVID-19 were included. Patients with incomplete hospital records were excluded. The study analysed routinely generated hospital data for patients with COVID-19. Frailty was assessed by specialist COVID-19 teams using the clinical frailty scale (CFS) and patients were grouped according to their score (1–2=fit; 3–4=vulnerable, but not frail; 5–6=initial signs of frailty but with some degree of independence; and 7–9=severe or very severe frailty). The primary outcome was in-hospital mortality (time from hospital admission to mortality and day-7 mortality). Findings Between Feb 27, and April 28, 2020, we enrolled 1564 patients with COVID-19. The median age was 74 years (IQR 61–83); 903 (57·7%) were men and 661 (42·3%) were women; 425 (27·2%) had died at data cutoff (April 28, 2020). 772 (49·4%) were classed as frail (CFS 5–8) and 27 (1·7%) were classed as terminally ill (CFS 9). Compared with CFS 1–2, the adjusted hazard ratios for time from hospital admission to death were 1·55 (95% CI 1·00–2·41) for CFS 3–4, 1·83 (1·15–2·91) for CFS 5–6, and 2·39 (1·50–3·81) for CFS 7–9, and adjusted odds ratios for day-7 mortality were 1·22 (95% CI 0·63–2·38) for CFS 3–4, 1·62 (0·81–3·26) for CFS 5–6, and 3·12 (1·56–6·24) for CFS 7–9. Interpretation In a large population of patients admitted to hospital with COVID-19, disease outcomes were better predicted by frailty than either age or comorbidity. Our results support the use of CFS to inform decision making about medical care in adult patients admitted to hospital with COVID-19

Comparison between first and second wave of COVID-19 outbreak in older people. The COPE multicentre European observational cohort study

Background: Effective shielding measures and virus mutations have progressively modified the disease between the waves, likewise health care systems have adapted to the outbreak. Our aim was to compare clinical outcomes for older people with COVID-19 in Wave 1 (W1) and 2 (W2). Methods: All data, including the Clinical Frailty Scale (CFS), were collected for COVID-19 consecutive patients, aged ≥65, from thirteen hospitals, in W1 (February-June 2020) and W2 (October 2020-March 2021). The primary outcome was mortality (time to mortality and 28-day mortality). Data were analysed with multilevel Cox proportional hazards, linear and logistic regression models, adjusted for wave baseline demographic and clinical characteristics. Results: Data from 611 people admitted in W2 were added to and compared with data collected during W1 (N = 1340). Patients admitted in W2 were of similar age, median [IQR], W2 = 79 [73-84]; W1 = 80 [74-86]; had a greater proportion of men (59.4% vs 53.0%); had lower 28-day mortality (29.1% vs 40.0%), compared to W1. For combined W1-W2 sample, W2 was independently associated with improved survival: time-to-mortality aHR= 0.78 (95%CI 0.65-0.93), 28-day mortality aOR = 0.80 (95%CI 0.62-1.03). W2 was associated with increased length of hospital stay aHR = 0.69 (95%CI 0.59-0.81). Patients in W2 were less frail, CFS (adjusted mean difference [aMD]=-0.50, 95%CI -0.81, -0.18), as well as presented with lower CRP (aMD=-22.52, 95%CI -32.00, -13.04). Conclusions: COVID-19 older adults in W2 were less likely to die than during W1. Patients presented to hospital during W2 were less frail and with lower disease severity and less likely to have renal decline

The impact of renovation capital expenditure on hotel property performance

This study investigates the impact of renovation capital expenditure on multiple measures of hotel property performance. We conduct analyses in two time periods: for a 3-year period immediately following renovation (short-term impact), and 3 to 6 years following renovation (long-term impact). The study is based on proprietary project, operational and financial data obtained for 305 renovation capital expenditure projects of individual properties within a single budget hospitality chain. We find renovation capital expenditures offer significant short-term beneficial impact in terms of increased revenue, profitability gains, higher customer satisfaction, and decreased repair and maintenance expense. Altogether, these outcomes should be advantageous to hotel property performance. In the long-term, a significant decline is apparent in revenue and profitability. Surprisingly, customer satisfaction does not decline, and repair and maintenance expense does not increase, which are both favorable

Using Fixed Wages for Management Control:An Intra-Firm Test of the Effect of Relative Compensation on Performance

Efficiency wage theory predicts employers can elicit better employee performance ex post by paying higher fixed compensation ex ante, relative to the market wage. Relative compensation may thereby constitute an alternative control mechanism when performance-based compensation is difficult to implement. Using proprietary data from 436 hotels in a U.S. lodging chain, we find that relative compensation is positively associated with performance, and additional profits associated with higher compensation exceed the wage increase. Relative compensation has a larger impact on profit when tasks are more complex and a smaller impact on profit, revenue, and quality when chain monitoring is stronger. Finally, the magnitude of the relation between relative compensation and financial performance (nonfinancial) is larger (the same) for employees earning more than the median wage compared with those earning less. Overall, our results are consistent with assertions that higher relative compensation attracts more capable candidates and mitigates shirking, but provide little support for reciprocity