Signaling in Secret: Pay-for-Performance and the Incentive and Sorting Effects of Pay Secrecy

Key Findings: Pay secrecy adversely impacts individual task performance because it weakens the perception that an increase in performance will be accompanied by increase in pay; Pay secrecy is associated with a decrease in employee performance and retention in pay-for-performance systems, which measure performance using relative (i.e., peer-ranked) criteria rather than an absolute scale (see Figure 2 on page 5); High performing employees tend to be most sensitive to negative pay-for- performance perceptions; There are many signals embedded within HR policies and practices, which can influence employees’ perception of workplace uncertainty/inequity and impact their performance and turnover intentions; and When pay transparency is impractical, organizations may benefit from introducing partial pay openness to mitigate these effects on employee performance and retention

Schools, teachers, and curriculum change: A balancing act?

Educational change is a fact of life for teachers across the world, as schools are subjected to constant and ubiquitous pressures to innovate. And, yet, many school practices remain remarkably persistent in the face of such innovation. This paradox of innovation without change is perplexing for policymakers and practitioners alike. This paper investigates the gap between policy and practice, between innovation and the changes in social practices that occur in response to such innovation. It draws upon empirical data from two case studies in Scotland — schools responding to new curriculum policy—exploring contrasting approaches to the management of innovation. One is a laissez faire approach, and the other a more directive managerial strategy. Through an analytical separation of culture, structure, and agency, derived from the social theory of Margaret Archer, the paper sheds light on the social processes that accompanied innovation in these two settings demonstrating how teacher culture and differing management styles impact upon externally initiated policy

Assessing managerial power theory: A meta-analytic approach to understanding the determinants of CEO compensation

Although studies about the determinants of CEO compensation are ubiquitous, the balance of evidence for one of the more controversial theoretical approaches, managerial power theory, remains inconclusive. The authors provide a meta-analysis of 219 U.S.-based studies, focusing on the relationships between indicators of managerial power and levels of CEO compensation and CEO pay-performance sensitivities. The results indicate that managerial power theory is well equipped for predicting core compensation variables such as total cash and total compensation but less so for predicting the sensitivity of pay to performance. In most situations where CEOs are expected to have power over the pay setting process, they receive significantly higher levels of total cash and total compensation. In contrast, where boards are expected to have more power, CEOs receive lower total cash and total compensation. In addition, powerful directors also appear to be able to establish tighter links between CEO compensation and firm performance and can accomplish this even in the face of powerful CEOs. The authors discuss the implications for theory and research regarding the determinants of executive compensation

Default-Mode-Like Network Activation in Awake Rodents

During wakefulness and in absence of performing tasks or sensory processing, the default-mode network (DMN), an intrinsic central nervous system (CNS) network, is in an active state. Non-human primate and human CNS imaging studies have identified the DMN in these two species. Clinical imaging studies have shown that the pattern of activity within the DMN is often modulated in various disease states (e.g., Alzheimer's, schizophrenia or chronic pain). However, whether the DMN exists in awake rodents has not been characterized. The current data provides evidence that awake rodents also possess ‘DMN-like’ functional connectivity, but only subsequent to habituation to what is initially a novel magnetic resonance imaging (MRI) environment as well as physical restraint. Specifically, the habituation process spanned across four separate scanning sessions (Day 2, 4, 6 and 8). At Day 8, significant (p<0.05) functional connectivity was observed amongst structures such as the anterior cingulate (seed region), retrosplenial, parietal, and hippocampal cortices. Prior to habituation (Day 2), functional connectivity was only detected (p<0.05) amongst CNS structures known to mediate anxiety (i.e., anterior cingulate (seed region), posterior hypothalamic area, amygdala and parabracial nucleus). In relating functional connectivity between cingulate-default-mode and cingulate-anxiety structures across Days 2-8, a significant inverse relationship (r = −0.65, p = 0.0004) was observed between these two functional interactions such that increased cingulate-DMN connectivity corresponded to decreased cingulate anxiety network connectivity. This investigation demonstrates that the cingulate is an important component of both the rodent DMN-like and anxiety networks

Reexamining the Pay Differentials-Organizational Outcomes Relationship in Korea : The Role of Organizational Identification

This research examines the effects of pay differentials on financial performance and employee turnover in Korea by considering a critical employee-based factor: organizational identification. Incorporating tournament theory and social identity theory, authors theorize that pay differentials increase financial performance and employee turnover without considering employees organizational identification. If considered, however, whereas the positive effects of pay differentials on financial performance will be weaker, the effects on turnover will be stronger. Using a sample of Korean cross-industry firms, results show pay differentials have a positive influence on only financial performance. Also, as predicted, while the positive relationship between pay differentials and financial performance became weaker, the relationship with turnover became stronger when employees organizational identification is high. Theoretical and practical implications for strategic pay structures are discussed