Phyllis A. Siegel

Pay Disparities Within Top Management Groups: Evidence of Harmful Effects on Performance of High-Technology Firms

This study examines the interactive effect of technological intensiveness and top management group (TMG) pay disparity on firm performance. Drawing on two literatures--task interdependence and group rewards--we argue that: (a) technological intensiveness imposes a considerable requirement for multiway information processing and collaboration among senior executives of a firm, and (b) collaboration is diminished when large pay disparities exist. Hence, TMG pay disparity should be more detrimental to subsequent performance of high-technology firms than low-technology firms. We construct seven different measures of executive pay disparity based on three major types of pay disparity (vertical, horizontal, and overall) and use a proprietary data set to test our hypotheses. The results provide consistent support for our hypotheses, thereby suggesting important implications for scholars and designers of executive compensation.

High procedural fairness heightens the effect of outcome favorability on self-evaluations: An attributional analysis

Abstract Previous research has shown that outcome favorability and procedural fairness often interact to influence employees’ work attitudes and behaviors. Moreover, the form of the interaction effect depends upon the dependent variable. Relative to when procedural fairness is low, high procedural fairness: (a) reduces the effect of outcome favorability on employees’ appraisals of the system (e.g., organizational commitment), and (b) heightens the effect of outcome favorability on employees’ evaluations of themselves (e.g., self-esteem). The present research provided external validity to the latter form of the interaction effect (Studies 1 and 4). We also found that the latter form of the interaction effect was based on people’s use of procedural fairness information to make self-attributions for their outcomes (Studies 2 and 3). Moreover, both forms of the interaction effect were obtained in Study 4, suggesting that they are not mutually exclusive. Theoretical and practical implications are discussed.