Tag Archives: Pay

Injuries, Injustice and Bad Timing: Why Pay-for-Performance Doesn’t Work

What are you worth?

Few subjects elicit more emotion than compensation.

While researchers are shedding new light on the emotional complexities of salary determination, fairness and transparency… is anyone looking at the clock?

Dispelling two compensation fallacies…

  1. Pay me more and I’ll be happy! (NOPE)

While research conducted by Kanas State University supports the long held belief that happy employees are less likely to leave their jobs and improve organizational performance; two separate studies indicate “Being top dog makes us happier than simply getting top dollar”. Employee satisfaction is as much about what you earn RELATIVE to others, as it is about how much you earn as an OBJECTIVE figure.

The importance of relative-pay may explain why research published in the Academy of Management Journal reported that secrecy about pay-levels stifles performance because employees are left to guess their relative salary rank and can’t see a clear link between performance and pay.

  1. Pay me more and I’ll perform better! (WRONG)

A decade long study of professional basketball and baseball athletes found players consistently boosted their performance in the year leading up to a contract renewal, only to have that performance drop in the year of their new contract—what the researchers dubbed the “contract year syndrome.”

Why we need to watch the clock…

Pay-for-performance schemes assume that last year’s performance is a solid indicator of what should and can be attained this year and that we’ll be incented to perform right now even though we’ll be paid much later.

My advice?

Find a company with has their product and pricing right, eliminates the gap between performance and pay, is financially transparent and values you as a person… Good luck with that!

Sources:

University of Missouri-Columbia. “Athletes’ performance declines following contract years.” ScienceDaily. ScienceDaily, 22 January 2014. <www.sciencedaily.com/releases/2014/01/140122170622.htm>.

Belogolovsky, P. Bamberger. SIGNALING IN SECRET: PAY FOR PERFORMANCE AND THE INCENTIVE AND SORTING EFFECTS OF PAY SECRECY. Academy of Management Journal, 2014; DOI: 10.5465/amj.2012.0937

Brown et al. Does Wage Rank Affect Employees’ Well-being? Industrial Relations, 2008; 47 (3): 355 DOI: 10.1111/j.1468-232X.2008.00525.x

Kansas State University. “Happy Employees Are Critical For An Organization’s Success, Study Shows.” ScienceDaily. ScienceDaily, 4 February 2009. <www.sciencedaily.com/releases/2009/02/090203142512.htm>.

How to earn $21,423.67 more by flirting and stomping your feet!

4.24 things you should know about negotiating:

1.    Avoiding round numbers can give you the upper hand.

When negotiating, Columba Business School researchers suggest that asking for an exact number will make you appear to have a better understanding of your true value and implies there is little room to haggle. By the way, this applies to selling your house as well!

2.    Women = 50.8% of population hold ONLY 2.5% of highest paid jobs and make $.75 on the dollar!

Many feel the income gap between men and women is partly due to women’s aversion to negotiating and the pay gap begins at the hiring negotiation. Research now suggests that women are just as avid negotiators IF given the opportunity. Men generally, disregard permissions (i.e. explicit statements like price or wages open to negotiation) and jump right in.

3.    A little harmless flirting doesn’t hurt…if you are a woman!

Confronted with the trade-off between being taken seriously or appearing open and warm; the London School of Economics reports a little extra smile goes a long way for women negotiators. Authentic, non-overt flirting works well for the female persuasion, adding to impressions of confidence. Male flirting seems to flip the switch on the creep-factor and should be avoided.

4.    Men can be angry, women can’t.

While men gain little from flirting, a little anger is just peachy! Yale University research suggests that people’s perception of anger differs between men and women. Male anger is generally accepted and sometimes rewarded, while women’s anger makes them appear less competent and may cause a loss in status.

4.24. In short, when you ask for something, be specific, flirt (women) and yell (men)! … As payment for this advice, please forward me 11.87% of all negotiated proceeds.

Sources: 

University of Chicago. “Women eager to negotiate salaries, when given the opportunity.” ScienceDaily. ScienceDaily, 15 November 2012. <www.sciencedaily.com/releases/2012/11/121115132355.htm>.

University of California – Berkeley Haas School of Business. “Flirting can pay off for women, study finds.” ScienceDaily. ScienceDaily, 9 October 2012. <www.sciencedaily.com/releases/2012/10/121009111942.htm>.

Malia F. Mason, Alice J. Lee, Elizabeth A. Wiley, Daniel R. Ames. Precise offers are potent anchors: Conciliatory counteroffers and attributions of knowledge in negotiations. Journal of Experimental Social Psychology, 2013; 49 (4): 759 DOI: 10.1016/j.jesp.2013.02.012

Yale University. “People Accept Anger In Men, But Women Who Lose Their Temper Are Seen As Less Competent, Study Shows.” ScienceDaily. ScienceDaily, 4 April 2008. <www.sciencedaily.com/releases/2008/04/080402152707.htm>.