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Explained pay dispersion theory (Shaw, Gupta, & Delery, 2002) contends that the consequences of pay dispersion depend on two critical contingencies: (1) the presence of legitimate or normatively acceptable dispersion-creating practices, and the (2) identifiability of individual contributions. In this chapter, the first 20 years of empirical evidence and theoretical offshoots of this theory are reviewed. Other recent studies on the outcomes of horizontal and vertical pay dispersion are also evaluated. The review concludes with an evaluative summary of the literature and the identification of several potential fruitful areas for future research.

Wages have been spreading out across workers over time – or in other words, the 90th/50th wage ratio has risen over time. A key question is, has the productivity distribution also spread out across worker skill levels over time? Using our calculations of productivity by skill level for the United States, we show that the distributions of both wages and productivity have spread out over time, as the right tail lengthens for both. We add Organization for Economic Co-Operation and Development (OECD) countries, showing that the wage–productivity correlation exists, such that gains in aggregate productivity, or GDP per person, have resulted in higher wages for workers at the top and bottom of the wage distribution. However, across countries, those workers in the upper-income ranks have seen their wages rise the most over time. The most likely international factor explaining these wage increases is the skill-biased technological change of the digital revolution. The new artificial intelligence (AI) revolution that has just begun seems to be having similar skill-biased effects on wages. But this current AI, called “supervised learning,” is relatively similar to past technological change. The AI of the distant future will be “unsupervised learning,” and it could eventually have an effect on the jobs of the most highly skilled.

Incentives are effective at enhancing productivity, but research also suggests that performance incentives can have “unintended negative consequences” including increases in hazard/injuries, increases in errors, and reduction in cooperation, prosocial behaviors, and creativity. Relatively overlooked is whether, when, and how incentives can be designed to prevent such negative consequences. The authors review literature in several disciplines (construction, healthcare delivery, economics, psychology, and [some] management) on this issue. This chapter, in toto, sheds a generally positive light and suggests that, beyond productivity, incentives can be used to improve other outcomes such as safety, quality, prosocial behaviors, and creativity, particularly when the incentives are thoughtfully designed. The review concludes with several potential fruitful areas for future research such as investigations of incentive-effect duration.

High-involvement work processes (HIWPs) are associated with high levels of employee influence over the work process, such as high levels of control over how to handle individual job tasks or a high level of involvement at team or workplace level in designing work procedures. When implementations of HIWPs are accompanied by companion investments in human capital – for example, in better information and training, higher pay and stronger employee voice – it is appropriate to talk not only of HIWPs but of “high-involvement work systems” (HIWSs). This chapter reviews the theory and practice of HIWPs and HIWSs. Across a range of academic perspectives and societies, it has regularly been argued that steps to enhance employee involvement in decision-making create better opportunities to perform, better utilization of skill and human potential, and better employee motivation, leading, in turn, to various improvements in organizational and employee outcomes.

However, there are also costs to increased employee involvement and the authors review the important economic and sociopolitical contingencies that help to explain the incidence or distribution of HIWPs and HIWSs. The authors also review the research on the outcomes of higher employee involvement for firms and workers, discuss the quality of the research methods used, and consider the tensions with which the model is associated. This chapter concludes with an outline of the research agenda, envisaging an ongoing role for both quantitative and qualitative studies. Without ignoring the difficulties involved, the authors argue, from the societal perspective, that the high-involvement pathway should be considered one of the most important vectors available to improve the quality of work and employee well-being.

Organizational scholars studying compensation often place an emphasis on certain employee groups (e.g., executives). Missing from this discussion is research on the compensation systems for low-wage jobs. In this review, the authors argue that workers in low-wage jobs represent a unique employment group in their understanding of rent allocation in organizations. The authors address the design of compensation strategies in organizations that lead to different outcomes for workers in low-wage jobs versus other workers. Drawing on and integrating human resource management (HRM), inequality, and worker literatures with compensation literature, the authors describe and explain compensation systems for low-wage work. The authors start by examining workers in low-wage work to identify aspects of these workers’ jobs and lives that can influence their health, performance, and other organizationally relevant outcomes. Next, the authors explore the compensation systems common for this type of work, building on the compensation literature, by identifying the low-wage work compensation designs, proposing the likely explanations for why organizations craft these designs, and describing the worker and organizational outcomes of these designs. The authors conclude with suggestions for future research in this growing field and explore how organizations may benefit by rethinking their approach to compensation for low-wage work. In sum, the authors hope that this review will be a foundational work for those interested in investigating organizational compensation issues at the intersection of inequality and worker and organizational outcomes.

Notes that the collaboration between Edwin F. Gay, founding dean of the Harvard Graduate School of Business Administration, and Arch W. Shaw, a Chicago publisher, exemplifies the significance of historical sensibility on the origins of US management studies. Points out that the attention they gave to historical methods and data as tools of inquiry reflected Gay’s professional training in economic history, but it also reflected the sense both men had of the significance of institutions and institutional patterns in business life. Both men also urged more attention to distribution as a serious topic for academic research and teaching, and also recognized co‐ordinating activity as a central function of modern management. Adds that the potential gains from scale economies depended on how well general managers filled this function, and that for this task managers required an outlook that transcended technical expertise. Suggests that they had to understand the broader institutional setting in which they managed and that historical awareness could illuminate that context.

Employee involvement (EI) is a major part of high-performance work systems (HPWS) that have successfully transformed a large number of organizations and have become standard practice in many new organizations. Despite the proven benefits of EI, however, it is still not as widely utilized as it could be even when accounting for industry and organization differences in its applicability. We suggest that EI implementation is limited in part by the change management challenges it presents. We review the recent research on EI and HPWS, and suggest ways in which change research and theory can inform our understanding of why EI practices have fallen short of their potential and how they can be effectively implemented.

Organizational behavior scholars have long recognized the importance of a variety of emotion-related phenomena in everyday work life. Indeed, after three decades, the span of research on emotions in the workplace encompasses a wide variety of affective variables such as emotional climate, emotional labor, emotion regulation, positive and negative affect, empathy, and more recently, specific emotions. Emotions operate in complex ways across multiple levels of analysis (i.e., within-person, between-person, interpersonal, group, and organizational) to exert influence on work behavior and outcomes, but their linkages to human resource management (HRM) policies and practices have not always been explicit or well understood. This chapter offers a review and integration of the bourgeoning research on discrete positive and negative emotions, offering insights about why these emotions are relevant to HRM policies and practices. We review some of the dominant theories that have emerged out of functionalist perspectives on emotions, connecting these to a strategic HRM framework. We then define and describe four discrete positive and negative emotions (fear, pride, guilt, and interest) highlighting how they relate to five HRM practices: (1) selection, (2) training/learning, (3) performance management, (4) incentives/rewards, and (5) employee voice. Following this, we discuss the emotion perception and regulation implications of these and other discrete emotions for leaders and HRM managers. We conclude with some challenges associated with understanding discrete emotions in organizations as well as some opportunities and future directions for improving our appreciation and understanding of the role of discrete emotional experiences in HRM.