Bruce A. Rayton

The contribution of corporate social responsibility to organizational commitment

This study investigates the relationship between organizational commitment and employee perceptions of corporate social responsibility (CSR) within a model that draws on social identity theory. Specifically, we examine the impact of three aspects of socially responsible behaviour on organizational commitment: employee perceptions of corporate social responsibility in the community, procedural justice in the organization and the provision of employee training. The relationship between organizational commitment and each aspect of CSR is investigated within a model that distinguishes between genders and includes a set of control variables that is drawn from the commitment literature (Meyer et al., 2002). The analysis is based on a sample of 4,712 employees drawn from a financial services company. The results emphasize the importance of gender variation and suggest both that external CSR is positively related to organizational commitment and that the contribution of CSR to organizational commitment is at least as great as job satisfaction.

Work engagement as a mediator between employee attitudes and outcomes

This paper assesses the role of work engagement in the relationships between affective commitment, job satisfaction and two employee outcomes – supervisor-rated job performance and self-reported intention to quit – using a cross-lagged research design. Our evidence supports the discriminant validity of work engagement, job satisfaction and affective commitment, and explores the temporal relationships between these constructs. Our findings suggest that work engagement mediates the relationships from affective commitment to job performance and intention to quit. Work engagement also mediates the relationship from job satisfaction to job performance, and partially mediates the relationship from job satisfaction to intention to quit.

Board Diversity in the United Kingdom and Norway: An Exploratory Analysis

This paper examines the evolving pattern of gender diversity of the boards of directors of leading Norwegian and British companies on a longitudinal basis. The period covered by the study covers the run up to proposed affirmative action legislation in Norway and, as such, affords an insight into corporate actions in this emerging institutional context. The findings demonstrate that, while board diversity has grown substantially in both countries in recent years, it has done so considerably more rapidly in Norway than in the United Kingdom. The analysis highlights the sectoral variation between the countries in the pattern and growth of board diversity and suggests that the vast majority of the overall growth in board diversity is the result of changing firm behaviour rather than sectoral shift in the United Kingdom or Norwegian economies. It is also shown that as diversity has increased there has been no fall in how experienced female directors are; neither is there evidence of a rise in the number of boards that female directors sit on. This suggests that the rapid growth in board diversity has been achieved without any fall in the quality of female directors.

Firm Performance and Compensation Structure: Performance Elasticities of Average Employee Compensation

Agency costs are a cost of production, and firms that do a better job of minimizing these costs should exhibit better performance. This paper tests this hypothesis by calculating the performance elasticity of average employee hourly compensation for U.S. manufacturing firms. This elasticity indicates the degree of alignment between employee and shareholder objectives. The estimated elasticity is indistinguishable from zero in low performance firms, and it equals 0.193 in high performance firms. While it is difficult to know whether an elevated performance sensitivity causes better firm performance, clearly the best performers in manufacturing industries link average employee pay to performance.

Women on corporate boards:a comparative institutional analysis

How do a country’s basic institutions enable or hinder women’s rise to the boards of public companies? The study evaluates this question with reference to the five basic institutions that research suggests are common across all countries: family, education, economy, government, and religion. The study draws on a sample, which consists of 23 countries, and the study is framed in neo-institutional theory. In analyzing the role of these institutions, the article seeks to understand better the relationships between specific institutions and the share of board seats held by women. The results suggest that four of the five basic institutions are related to the share of board seats women hold. Family, education, economy, and government influence women’s rise to the board; however, religion does not influence women’s rise to the corporate board of directors.

Corporate Social Performance and the Psychological Contract

This study investigates the role of corporate social performance (CSP) within the psychological contract to better illuminate the micro-processes through which CSP promotes improved firm–stakeholder relationships. It extends the study of psychological contract breach beyond the dyadic relationship between the organization and the employee through an analysis of the impact of employee perceptions of internal and external CSP on psychological contract breach. In so doing, we add significantly to the growing evidence base in relation to if, how, and when affective commitment is enhanced by CSP by explicitly accounting for the role of employee expectations in respect of their employers’ socially responsible initiatives in shaping employees’ attitudinal outcomes.

Rent-sharing or incentives? Estimating the residual claim of average employees

The rent-sharing literature and the agency literature both predict a link between pay and performance. The rent-sharing literature relies on short-term market power to explain this link, while the agency literature bases its prediction on the importance of incentives in principal-agent relationships. Annual data from an unbalanced panel of US manufacturing firms indicate that the performance-elasticity of average employee pay is approximately 0.127271 in small firms while it not significantly different from zero in large firms. The relative lack of incentive pay in the group of large firms demonstrates that the pay-performance link evident in US manufacturing firms is inconsistent with the exclusive truth of the rent-sharing hypothesis.

The residual claim of rank and file employees

Abstract This paper estimates the intensity of the value-maximization incentives for average employees generated through the combination of wage, salary, and bonus mechanisms. This is accomplished through estimation of the elasticity of average employee hourly compensation with respect to changes in firm performance. This performance elasticity indicates the degree of alignment between employee and shareholder objectives, and it can also be interpreted as an incomplete residual income claim for employees. The estimated performance elasticity for the full sample of firms is not significantly different from a CEO salary-plus-bonus performance elasticity of 0.1 published in Coughlan and Schmidt [Journal of Accounting and Economics 7 (1985) 43]. Jensen and Murphy [Journal of Political Economy 98 (1990) 225] find that CEOs received approximately US

Facets of Job Satisfaction and Work Engagement

3.25 for each US

Workplace self-selection into Investors in People

1000 increase in shareholder wealth. This translates to an elasticity of just over 57, but most of these payments come through channels other than salaries and bonuses. Jensen and Murphy report a performance sensitivity of salary and bonus payments for CEOs that is equivalent to analogous elasticities for rank and file workers reported in this paper. While the rewards CEOs receive through salary and bonus channels are larger than those of average employees in absolute terms, these rewards represent comparable fractions of income. This paper also finds differences in the pay-performance link based on firm size. The estimated performance elasticity is 0.197 in small firms and is indistinguishable from zero in large firms. The results indicate that firms use wage, salary and bonus adjustments to direct approximately 5.3% of firm value increases to employees. Although the precise link between pay and performance is not visible with this data, these results indicate that average employees benefit when the firm performs well.