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Pay inequity effects on back-office employees’ job performances: the case of a large insurance firm

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  • Yingchao Zhang
  • Oliver Fabel
  • Christian Thomann
Abstract
Using personnel data on back-office employees of an insurance company, we investigate the effect of pay inequity—as measurable and, hence, perceivable by an individual—on the particular individual’s job performance. We calculate three measures of pay inequity, “inequality,” “envy,” and “altruism,” for total pay as well as, separately, for three pay components, salary, commissions, and year-end bonuses. Job performance is measured by the value of commissions for new contracts that accrue to the sales agents who are serviced by the back-office employee. Quantile panel regressions show that inequity effects on performance distinctly differ over the performance distribution and across the different pay components. Further, results depend on the time structure of pay and, possibly also, on pay secrecy rules. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Yingchao Zhang & Oliver Fabel & Christian Thomann, 2015. "Pay inequity effects on back-office employees’ job performances: the case of a large insurance firm," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(2), pages 421-439, June.
    • Handle: RePEc:spr:cejnor:v:23:y:2015:i:2:p:421-439
    DOI: 10.1007/s10100-015-0381-z
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    Cited by:

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    3. Wojciech Koziol & Anna Mikos, 2020. "The measurement of human capital as an alternative method of job evaluation for purposes of remuneration," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(2), pages 589-599, June.
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    More about this item

    Keywords

    Pay inequity; Individual performance; Pay components; M52; J33;
    All these keywords.

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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