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Research Summary An initial public offering (IPO) ushers in many changes to the organization's boards of directors, including the installation of a formal and comprehensive board leadership structure. This paper shows that higher board undervaluation, that is, the average degree to which directors' qualifications based on normatively accepted criteria for board leadership are not duly reflected in their appointments to the board chair and committee chair positions, is associated with higher director turnover, and with lower qualifications among new directors in the subsequent years. Further, the effect of board undervaluation on firm performance is mediated both by director turnover and new directors' qualifications. But these two mediators operate as opposite forces on performance—director turnover is associated with lower firm performance, but counter‐intuitively lower new‐director‐qualifications are associated with higher firm performance. Managerial Summary How should a privately‐held entrepreneurial firm design its board leadership structure at IPO? What are the implications for board evolution and even firm performance? We find that higher board undervaluation, that is, the average degree to which directors' qualifications based on normatively accepted criteria for board leadership are not duly reflected in their appointments to the board chair and committee chair positions, is associated with higher director turnover, and with lower qualifications among new directors in the subsequent years. These two evolutionary paths act in opposite ways on performance—director turnover lowers firm performance, but lower new‐director‐qualifications improve firm performance. This has important implications for boards, investors, and stock exchange guidelines on board leadership structure.

In this essay, the authors rejoin the debate about financial incentive effectiveness. They (a) briefly review the state of the literature in 1998, (b) highlight new meta-analytic findings and update conclusions regarding the financial incentives–performance relationship, (c) address the myth that financial incentives erode intrinsic motivation, (d) provide explanations for the presumed failure of financial incentives and (e) offer some concluding thoughts and suggestions for future research.

The authors extend prior literature by examining, in two distinct field settings, smallest meaningful pay increases (SMPIs) in terms of magnitude, behavioral intention, and affective reactions. In Study 1, a two-wave study of 177 employees of a university medical center in the United States, the authors find stable thresholds of about 5.0 percent for positive reactions to pay increases (magnitude [5.4 percent], behavioral intentions [4.2 percent], and affective reactions [5.6 percent]). In Study 2, a sample of 495 university employees in Finland, the authors also find stable but slightly higher thresholds of about 8 percent for behavioral intentions (8.4 percent) and positive affective reactions (7.2 percent) to pay increases. They also find threshold effects of −5.7 percent for behavioral intentions and −5.8 percent for negative affective reactions in response to restricted future pay increases levied in the transition to a new pay system. Discussion of the results centers on pay raise administration and future research regarding implied and direct pay reductions.

Reversing the focus on human capital accumulations in the resource-based literature, the authors examine the issue of human capital losses and organizational performance. They theorize that human capital losses markedly diminish the inimitability of human capital stores initially, but that the negative effects are attenuated as human capital losses increase. They argue further that these effects are more dramatic when human resource management (HRM) investments are substantial. As predicted, Study 1 shows that the human capital losses (voluntary turnover rates)-workforce performance relationship takes the form of an attenuated negative relationship when HRM investments are high. Study 2 shows stronger curvilinear effects of voluntary turnover rates on financial performance via workforce productivity under these conditions. Implications for resource-based theory and strategic HRM are addressed.

We develop and test a multi-level interactive model of the relationships among self-monitoring, co-workers' formal and informal status, and justice-related information flow in a scenario-based field study of 4,011 unique relationships collected from 84 respondents. We predict that individuals high in self-monitoring, because they attend more carefully to social cues and have higher levels of expressive control, will be more likely than low self-monitors to intend to seek, accept, and provide justice-related information as a function of their co-workers' formal status, the size of their co-workers' networks, and the advantageousness of their co-workers' position in the networks (betweenness centrality). This cross-level interaction hypothesis receives strong support in terms of co-workers' network size, limited support in terms of co-workers' betweenness centrality, and no support in terms of co-workers' formal status. We address the implications of these findings for the literature on self-monitoring, social construction of organizational justice, and social networks, as well as the strengths and limitations of our approach.

We developed and tested a theory of the relationship between merit pay raises and organization-based self-esteem (OBSE) in a longitudinal study of hospital employees. We predicted that the positive relationship between merit pay raise size and OBSE would be stronger when pay-for-performance (PFP) perceptions were high and predicted further that this interaction would be stronger among older employees. As predicted, merit pay raises were not related to OBSE levels for younger employees, but, among older employees, larger merit raises increased OBSE when PFP perceptions were high and decreased OBSE when PFP perceptions were low. Implications of the study for merit pay theory and practice are addressed. Copyright © 2008 John Wiley & Sons, Ltd.

The relationship between pay dispersion and the quits patterns of good, average, and poor performers was explored among a sample of motor carriers. Results showed that under high pay system communication, pay dispersion was negatively related to good performer quits when performance-based pay increases were emphasized, and positively related when they were not. The results for seniority-based pay increases were different. Under high pay system communication, pay dispersion was negatively related to average performer quits when seniority-based pay increases were emphasized, and the relationship was attenuated when they were not. Contrary to expectation, pay dispersion was not consistently related to quit patterns when pay system communication was low. Predictions regarding quit patterns of poor performers were not supported. Implications of the research are addressed and future research directions identified. There is general agreement in the literature that pay dispersion among key employees (horizontal or within-group pay dispersion) relates to turnover levels in organizations. This assumption goes back at least a half-century (e.g., Livernash, 1957), but theory and empirical findings to date are ambiguous about the specific nature of the relationship. Instead, existing theory and empirical results continue to offer contradictory or competing insights about the effects of pay dispersion on organizational outcomes, leading some to refer to the situation as a theoretical dilemma This study was funded by a grant from the SHRM foundation. The interpretation, conclusions, and recommendations, however, are those of the authors, and do not necessarily represent those of the foundation. An earlier version of this paper was presented at the 2001 annual meetings of the Southern Management Association. We thank Associate Editor Murray Barrick, two anonymous reviewers, Michelle Duffy, Ruolian Fang, Robert Vellella, Jing Zhu, Sven Kepes, Jackie Thompson, and seminar participants at The Ohio State University for helpful comments. Correspondence and requests for reprints should be addressed to Jason D. Shaw, Uni

We extend person‐job fit research by investigating job performance as a moderator of the supplies‐values fit relationship with strain outcomes (somatic complaints and depression). Drawing on cybernetic stress and psychological centrality perspectives, we argue that supplies‐values misfit relates to lower well-being levels when job performance is low but that this effect is attenuated when job performance is high. The results are consistent with this prediction across 3 studies that provide progressively more rigorous tests of the hypothesis. Implications of the results for theoretical and empirical person‐job fit research are addressed. There is consistent and compelling evidence that fit (or misfit) between individual preferences for various tasks characteristics and the characteristics actually present in the job is related to a variety of health and wellbeing outcomes (e.g., Caplan, Cobb, French, Harrison, & Pinneau, 1980; Edwards, 1996; Edwards & Parry, 1993; French, Caplan, & Harrison, 1982). The supplies‐values (S‐V) or needs‐supplies fit approach to stress offers conceptual extensions over job demands (e.g., Cooper & Marshall, 1976) or psychophysiological response theories (e.g., Parker & DeCotiis, 1983) by incorporating both the situations an individual encounters in the environment (task characteristics, in this case) and the individual’s preferences for, or interests in, jobs with these attributes. S‐V fit is defined as

The compensation literature is replete with arguments, but lacking in empirical tests, regarding the effects of pay dispersion on organizational outcomes. Pay dispersion may increase effort and provide incentives for high workforce performance levels, but may also inhibit cooperation and goal orientation among employees. Drawing on several theoretical perspectives (individual motivation, institutional theory, organizational justice, and neoclassical economics), this study predicts that pay dispersion will be associated with higher levels of workforce performance when accompanied by formal individual incentive systems and independent work, while pay compression is desirable in the absence of individual incentive systems and when work is interdependent. Survey research studies in two industrial sectors (the motor carrier and concrete pipe industries) were conducted to address these issues. Interactive regression results were generally supportive of the predictions across several measures of workforce performance (accident rates, safety violations, and productivity). Implications of these studies for strategy implementation in terms of compensation theory and practice are addressed. Copyright © 2002 John Wiley & Sons, Ltd.

The consequences of pay fairness perceptions are rarely explored, in part because of the lack of a compelling theory which relates pay attitudes directly to distal health and behavioural outcomes. We propose e nancial need as a potential moderator of the relationship between pay fairness and employees’ physical health, psychological health, and work-related behaviours. Di Verential exacerbating and attenuating e Vects are predicted for various outcomes. In a longitudinal study of 651 employees of e ve American mid-western organizations, exacerbation predictions were strongly supported in cross-sectional analyses for life satisfaction, depression, and somatic complaints. Attenuation predictions received support cross-sectionally and longitudinally for job search intent, but were not supported for performance, absenteeism, or voluntary turnover. The importance of these results for understanding pay dynamics and for outlining mid-range theories is highlighted.

This paper reports the development of a team reward attitude construct and intial validation of a measure in a longitudinal study of team members (initial n = 566). Confirmatory factor analysis results provide support for a revised 9-item scale in two different time periods separated by four months. The measure was positively related to other team-related attitudes (preference for group work and perceived efficacy of teams) and locus of control, and negatively related to a proxy for ability. Implications of the research and future research directions are addressed. Copyright © 2001 John Wiley & Sons, Ltd.

This paper examines the interactive relationship between the use of integrated manufacturing and compensation practices in predicting several aspects of plant performance in the concrete pipe industry. We predicted that compensation practices reinforcing collective effort, teamwork, and flexibility (team incentives and skill-based pay) enhance the effectiveness of integrated manufacturing systems (total quality management and advanced manufacturing technology), while practices inhibiting cooperation and teamwork among employees (individual incentives and seniority-based pay) impede it. Results provide moderate support for the congruence model across several measures of plant effectiveness (labor hours per ton, lost-time accidents, perceptual performance, and customer satisfaction). Implications of the research are addressed. Copyright © 2001 John Wiley & Sons, Ltd.

This study explores the relationships among unionization, compensation practices, and employee attachment (quit rates and tenure) among trucking companies to assess the applicability of Freeman and Medoff's exit/voice argument. Unionization was associated with lower quit rates, higher tenure, a better compensation package, and stronger voice mechanisms. The relationship of unionization to quit rates and tenure becomes nonsignificant after accounting for compensation (pay and benefits), and voice mechanisms do not add explanatory variance.

In July 1996, because of concern regarding the possible transmission of Creutzfeldt-Jakob disease, the province of Quebec stopped the reuse of percutaneous transluminal coronary angioplasty (PTCA) catheters. Prior to this time, PTCA balloon catheters were used a maximum of four times and guide catheters a maximum of two times in the cardiac catheterization laboratory at our institution. After this time, only new catheters were used. In order to examine the effects of catheter reuse on duration of PTCA procedures and clinical outcomes, we compared 53 consecutive patients undergoing PTCA prior to 21 July 1996 with 54 consecutive patients undergoing PTCA after that time. A total of 81 men and 26 women underwent PTCA (average age, 64 +/- 12 years). There were no significant differences between the single-use and reuse groups with respect to baseline characteristics. There were also no significant differences in the numbers of PTCA catheters used (97 vs. 103, P = NS) or angiographic success rates (88% vs. 83%, P = NS). There was a trend for total procedure time and fluoroscopy time to be slightly longer for single-use compared with reuse cases (49.2 vs. 45.7 min and 19.7 vs. 16.8 min, respectively; P = NS for both comparisons). However, after controlling for case severity and the use of stents, there were no significant differences in total procedure time or fluoroscopy time between the two groups. We found little evidence to suggest that the reuse of PTCA catheters is associated with longer total procedure time or fluoroscopy time. We conclude that if catheter reuse is not found to be associated with infectious disease transmission, its widespread use should be considered. Cathet. Cardiovasc. Intervent. 48:54-60, 1999.