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This study introduces vertical pay dispersion, a prevailing equity issue in discussions of organizations and society, to public management research. Bridging tournament and equity theory with the publicness debate, the study analyses the role of publicness dimensions —ownership, funding, and control— for manager-to-worker pay ratios of state-owned enterprises (SOEs). The results show that, for a unique five-year data set, ownership publicness partly affects vertical pay dispersion, and the effects are moderated by city and SOE size. The study enhances the understanding of vertical pay dispersion in the public sector and offers a research agenda regarding the determinants.

[Abstract]This paper summarizes the identity of human resources in tournament theory. It aims to analyze the contributions made by ideas from the concept of identity on behavioral economic models and human resources concepts from tournament theory. The paper simplifies the comparison of human resources in management personnel systems and job markets of Indonesian and Japanese companies. A game-theoretical model is formed based on the results.

The COVID‐19 pandemic paralyzed the world and revealed the critical importance of supply chain management – perhaps more so than any other event in modern history – in navigating crises. The extensive scope of disruption, massive spillover of effects across countries and industries, and extreme shifts in demand and supply that occurred during the COVID‐19 pandemic illustrate that pandemics are qualitatively different from typical disruptions. As such, pandemics require scholars to take a fresh look at what lenses offer understanding of supply chain phenomena in order to help supply chain managers better prepare for the next pandemic and foster transiliency (i.e., the ability to simultaneously restore some processes and change – often radically – others). To help scholars and managers achieve these aims, we offer an agenda for supply chain management research on pandemics by considering how the key tenets of well‐known and emergent theories can illuminate challenges and potential solutions. Specifically, we consider how resource dependence theory, institutional theory, resource orchestration theory, structural inertia, game theory, real options theory, event systems theory, awareness‐motivation‐capability framework, prospect theory, and tournament theory offer ideas that can help scholars build knowledge about pandemics’ effects on supply chains as well as help managers formulate responses. This article is protected by copyright. All rights reserved

Objetivo do estudo: Este estudo tem como objetivo identificar a emergência de novas pesquisas no campo da estratégia, considerando as publicações no periódico Strategic Management Journal, num período de 12 anos.Metodologia/abordagem: Na base de dados Web of Science, pesquisamos o periódico Strategic Management Journal, em dois períodos, 2007 a 2012 e 2013 a 2018. Selecionamos somente artigos relacionados a “business” e “management”. Esta busca gerou 1.100 artigos para nossa base de dados, sendo 376 artigos publicados no primeiro período e 724 artigos, no segundo período. Utilizamos técnicas de pareamento nas análises feitas nos softwares Bibexcell e no SPSS. Paralelamente, elaboramos o diagrama de rede, no software Ucinet, que suportam as relações entre os fatores encontrados e uma análise confirmatória dos achados.Originalidade/Relevância: Estudos bibliométricos buscam, constantemente, analisar como anda a estrutura teórica das teorias e, no campo da estratégia, não tem sido diferente. Assim, há relevância em verificar como os estudos em estratégia têm evoluído em termos teóricos, dada a sua multidisciplinaridade, sendo que um estudo comparativo entre dois períodos distintos, mas subsequentes, caso deste trabalho, oferece uma visão global da direção futura dos estudos. Novas frentes teóricas foram encontradas, em essência, nos estudos comportamentais que emergiram em pesquisas anteriores e se fortalecem nas novas pesquisas.Principais resultados: A pesquisa identificou 57 artigos publicados no período de 2007 a 2012 e seis fatores e, no período entre 2013 e 2018, foram 22 artigos e cinco fatores. Os resultados confirmaram a evolução de estudos em teorias comportamentais, principalmente, quanto aos dirigentes e suas estratégias. Houve outros achados, como pesquisas relacionadas à dinâmica ambiental e à dinâmica competitiva. Identificou-se, ainda, forte participação dos estudos com teorias baseadas em recursos, custos de transação e a emergência de novas teorias, como a dos torneios e estratégia comportamental.Contribuições teóricas/metodológicas: Pesquisas bibliométricas podem ser exemplos de como fazer análise de referências. Neste sentido, este estudo contribui para que pesquisadores tenham um parâmetro em estudos similares, com análise de pareamento e na combinação de análise de dois períodos subsequentes. Na vertente teórica, os achados dão robustez a pesquisas anteriores, validando teorias consagradas e mostrando teorias emergentes.Contribuições sociais/para a gestão: Nesta pesquisa, obtivemos resultados que confirmam a multidisciplinaridade nos estudos em estratégia. Teorias comportamentais emergiram e se fortaleceram nos últimos anos. Para gestão, verificamos que as pesquisas analisam amplamente o comportamento estratégico dos membros do alto escalão em decisões estratégicas, como em aquisições de empresas, na formação de alianças, no desempenho dos gestores quando estão sob contratos, remunerações diferenciadas ou em competições. Por este motivo, algumas teorias emergiram no segundo período, como a teoria dos torneios, não destacadas em estudos bibliométricos anteriores. Por fim, um resumo comparativo dos fatores encontrados nos dois períodos auxilia gestores nas perspectivas gerenciais sobre estratégias organizacionais. Study objective: This study aims to identify the emergence of new studies in the field of strategy, considering 12 years of publications in the Strategic Management Journal.Methodology / approach: In the Web of Science database, we searched the journal “Strategic Management Journal”, in two periods, 2007 to 2012 and 2013 to 2018. We exclusively selected articles related to “Business” and “Management”. This search generated 1,100 articles for our database, with 376 articles from the first period and 724 articles from the second period. We use matching techniques in the analyses performed using Bibexcel and SPSS. At the same time, in Ucinet, we created the network diagram which supports the relationships between the identified factors and confirmatory analysis of the findings.Originality / Relevance: Bibliometric studies are constantly seeking to analyze how the theoretical structure of theories is progressing, and in strategy, it has not been different. To verify how studies in strategy have evolved in theoretical terms, given their multi-disciplinarity, a comparative study of two distinct but subsequent periods offers a global view of where the studies are heading. We discovered new theoretical fronts in essence to behavioral studies that emerged in previous studies and are strengthened in new research.Main results: The search identified 57 articles and six factors from 2007 to 2012 and 2013 to 2018 produced 22 articles and five factors. The results confirmed the evolution of studies in behavioral theories, especially regarding managers and their strategies as well as other findings, such as research related to environmental dynamics and competitive dynamics. We still have strong participation of studies with resource-based theory, transaction costs, and the emergence of new theories such as tournaments and behavioral strategy.Theoretical / methodological contributions: Bibliometric searches can be examples of how to analyze references. In this sense, this study helps researchers have a parameter in similar studies, with pairing analysis and the combination of analysis of two subsequent periods. On the theoretical side, the findings give strength to previous research, validating established theories and showing emerging theories.Social / management contributions: This research obtained results that confirm the multi-disciplinarity in strategy studies. Behavioral theories have emerged and strengthened in recent years. For management, we found that the surveys substantially analyze the strategic behavior of senior members in strategic decisions, such as in company acquisitions, in the formation of alliances, and how managers will perform when they are under contracts, differentiated remuneration, or in competition. For this reason, some theories emerged in the second period, such as tournament theory, not highlighted in previous bibliometric studies. Finally, a comparative summary of the factors found in the two periods helps managers in managerial perspectives on organizational strategies. Objetivo del estudio: Este estudio tiene como objetivo identificar el surgimiento de nuevos estudios en el campo de la estrategia, considerando publicaciones en el Strategic Management Journal, en un período de 12 años de publicaciones.Metodología / enfoque: En la base de datos de Web of Science hicimos búsquedas en la revista “Strategic Management Journal”, en dos periodos, 2007 a 2012 y 2013 a 2018. Solo seleccionamos artículos y relacionados con “Business” e “Management”. Esta búsqueda generó 1100 artículos para nuestra base de datos, con 376 artículos para el primer período y 724 artículos para el segundo período. Utilizamos técnicas de bibliographic coupling en los análisis realizados en Bibexcell y SPSS. Y en paralelo, elaboramos el diagrama de red, en Ucinet, que sustenta las relaciones entre los factores encontrados y un análisis confirmatorio de los hallazgos.Originalidad / Relevancia: Los estudios bibliométricos buscan constantemente analizar la estructura teórica de las teorías y en estrategia no ha sido diferente. Para comprobar cómo los estudios en estrategia han evolucionado en términos teóricos, dada su multidisciplinariedad, un estudio comparativo de dos períodos distintos, pero posteriores, ofrece una visión global de hacia dónde se dirigen los estudios. Se encontraron nuevos frentes teóricas, en esencia a los estudios conductuales que surgieron en estudios previos y se fortalecen en nuevas investigaciones.Resultados principales: La búsqueda identificó 57 artículos de 2007 a 2012 y 6 factores y de 2013 a 2018 hubo 22 artículos y 5 factores. Los resultados confirmaron la evolución de los estudios en las teorías del comportamiento, especialmente en lo que respecta a los gerentes y sus estrategias. Y otros hallazgos, como la investigación relacionada con la dinámica ambiental y la dinámica competitiva. Seguimos teniendo una fuerte participación de estudios con teorías basadas en recursos, costos de transacción y el surgimiento de nuevas teorías como torneos y estrategia conductual.Contribuciones teóricas / metodológicas: La investigación bibliométrica puede ser ejemplos de cómo analizar referencias. En este sentido, este estudio ayuda a los investigadores a tener un parámetro en estudios similares, con análisis de emparejamiento y la combinación de análisis de dos períodos posteriores. En el aspecto teórico, los hallazgos dan fuerza a investigaciones previas, validando teorías establecidas y mostrando teorías emergentes.Contribuciones sociales / de gestión: Esta investigación obtuvo resultados que confirman la multidisciplinariedad en los estudios de estrategia. Las teorías del comportamiento han surgido y se han fortalecido en los últimos años. Para la gerencia, encontramos que las encuestas analizan mucho el comportamiento estratégico de los altos directivos en las decisiones estratégicas, como en las adquisiciones de empresas, en la formación de alianzas, y cómo se desempeñarán los gerentes cuando estén bajo contratos, remuneración diferenciada o en competencia. Por esta razón, algunas teorías surgieron en el segundo período, como la teoría de los torneos, no destacadas en estudios bibliométricos previos. Finalmente, un resumen comparativo de los factores encontrados en los dos períodos ayuda a los gerentes en las perspectivas gerenciales de las estrategias organizacionales.

Based on the research of domestic and foreign scholars, this paper combines China’s unique economic environment and institutional background, based on the principal-agent theory and the tournament theory, and takes the data of 2007-2016 A-share listed companies in Shanghai and Shenzhen stock exchanges as the sample. This article studies the relationship between pay gaps and innovation efficiency within executive teams. Research shows that there is a significant negative correlation between the salary gap of executive teams and the innovation efficiency, indicating that the larger the salary gap of executive teams, the lower the efficiency of R & D investment. The results are consistent with the argument that larger tournament incentives allow managers to make less efficient R & D investments.

We present evidence on the operation of incentive pay from a field experiment in Pakistan, looking at piece rates and pay based on rank achieved in a tournament. Importantly, some workers are in contracts ‘tying’ them to the employer for several picking seasons; others are ‘untied’, in the sense of being employed for only the current season. We find that incentive pay (of either type) improves productivity by 30%, on average, but that there are important differences across the types of workers: in particular, tournament incentives are less effective amongst the tied workers. We suggest that our main results have implications for tournament theory and the design of incentive pay schemes, particularly with regard to the fact that they may discourage some workers and, thus, reduce incentives.

Summary: It may be surprising that one of the most popular compensation schemes in business is so open to being hacked – to having managers cheat to win. We explore tournament theory to detail its vulnerabilities to various forms of cheating unilateral and multilateral. We identify who is most likely to be involved and under what conditions. We describe the costs to the victims, to the firm, and to society. We outline the possible strategic effects – in terms of firm performance. And, we discuss possible ways to address these vulnerabilities to the schemes we rely on to motivate managers to put in the right efforts, to take the right risks, and to lead the right way. JEL classification: M52, J33, D82, J31, D73, Keywords: Cheating, Managerial compensation schemes, Tournament theory, Vulnerabilities

This study empirically investigates the interrelationship between pay and performance of CEOs/board of directors in an emerging market, Pakistan. The study uses GMM approach to account for the problem of potential endogeneity and unobserved heterogeneity that arises due to the potential reverse causality (pay and performance) for a sample of non-financial firms listed in the KSE over the period of 2009–2016. This study provides evidence that the pay-performance framework supports the agency theory whereby CEOs/board of directors are compensated for their prior level of market-based performance. In addition, it weakly supports the notion of the steward/tournament theory. Thus, CEOs/board director's remuneration is highly persistent and takes time to adjust to long-run equilibrium. Keywords: Executive remuneration, Firm performance, Corporate governance, Emerging market, GMM, JEL classification: G30, M12, P17, C39

In a simplifying analytical framework with endogenous levels of actual and self-reported emissions, we consolidate the existing literature into three main hypotheses about the relative merits, for a resource-constrained regulator, of random (RAM) and competitive (CAM) audit mechanisms in the presence or absence of peer information about actual emissions. Testing the three hypotheses in a quasi-laboratory experiment (N = 131), we find supportive evidence that CAM always induce more truthful reporting than RAM. Moreover, we provide the empirical validation of the theoretical prediction that CAM can succeed in aligning actual emissions more closely with the social optimum in the presence of peer information when RAM cannot. Behavioral mechanisms prevent reaching the first-best outcome.

One of the main focus of management is on ways to motivate employees to improve their performance, initially at the level of individuals, and ultimately at the level of the organization (Denisi & Pritchard, 2006). So, it is critical to set effective performance appraisal systems to stimulate employees’ efforts. Since tournament theory arose out of the labor economics literature (Lazear & Rosen, 1981), it has expanded to a wide range of other disciplines including management. Most of the previous studies on prize structure using this theory have focused on a two-level prize while, in real life, practitioners always adopt a multiple level prize structure. In addition, previous studies on feedback in a dynamic tournament have unveiled agents’ reactions, however, there are few studies on feedback in multiple agents’ tournaments with multiple level prize structure. These two gaps between theory and practice have motivated the research in this thesis. Based on tournament theory, we study the effect of prize structure and feedback policy on employee efforts in a multi-person tournament. The experimental method is used to compare the efforts in four situations, including two-level prize structure with full feedback policy, multiple level prize structure with full feedback, two-level prize structure with no feedback, and multiple level prize structure with no feedback. After the experiment, six participants were invited to join a focus group interview for further insights on the experiment. As a supplement, a single case study of a factory in China is conducted and data collected through document analysis and a questionnaire distributed to employees. The results show that the subjects’ efforts in a multiple level prize structure is higher than that in a two-level prize structure in a multi-person tournament. Under both the policy of full feedback of own and relative performance information, and under no feedback policy, the effort in multiple level prize is also higher than that in two-level prize. These findings may contribute to develop the tournament theory in terms of prize structure in a multi-person tournament, and to bridge the gap between academia and industry since results could guide practitioners in the industry to apply a multiple level prize structure into employee performance management systems in order to maximize employee’s efforts and the overall output. A melhoria do desempenho dos trabalhadores é uma das principais preocupações da gestão quer a nível individual quer organizacional (Denisi & Pritchard, 2006), pelo que é necessário conceber sistemas de avaliação que promovam o esforço desenvolvido. A teoria dos torneios, proveniente da literatura da economia do trabalho (Lazear & Rosean, 1981), é precisamente um desses sistemas depois de se ter expandido para a gestão e para outras disciplinas. Contudo, muitos dos estudos sobre estruturas de prémios que utilizam esta teoria, têm-se concentrado em prémios com dois níveis enquanto na prática as organizações utilizam estruturas de múltiplos níveis. Além disso, embora existam trabalhos anteriores que têm revelado as reações dos agentes em torneios dinâmicos, são poucos os estudos sobre essas mesmas reações em estruturas de prémios de múltiplos níveis. Foi esta contradição entre a teoria e a prática que motivou esta tese. Com base na teoria dos torneios, a tese estuda o efeito da estrutura de prémios e da política de "feedback" seguida pela organização sobre os esforços dos trabalhadores num torneio com vários sujeitos. Utilizou-se o método experimental para se compararem os esforços em quatro situações: estrutura de prémios de dois níveis e política com e sem "feedback"; estrutura de prémios de níveis múltiplos com e sem "feedback". Finda a experiência, convidaram-se 6 participantes para um grupo de discussão a fim de se obterem mais esclarecimentos sobre a prova. Em complemento estudou-se o caso de uma empresa fabril na China através de análise documental e de um questionário distribuído aos empregados. Os resultados demonstram que, num torneio com múltiplos sujeitos, os esforços são superiores quando é utilizada uma estrutura de prémios de níveis múltiplos. O mesmo acontece em caso de política de "feedback" integral ou mesmo quando não existe "feedback". Estes resultados podem contribuir para ajudar a desenvolver a teoria dos torneios no que se refere à estrutura de prémios em torneios com múltiplos sujeitos e podem também aproximar a teoria da prática ajudando os gestores na implementação de sistemas que maximizem o desempenho dos trabalhadores.

Based on Chinese traditional Confucianism and under the policy background of “salary limit order”, this paper uses tournament theory and social comparison theory to research and analyze the relationship between regional social fairness and the executive-employee pay gap, its effect on employee productivity and the effect of the matching relationship on company performance incentives. Based on the questionnaire survey of China’s comprehensive social survey from 2010 to 2016 and the data of all A-share listed companies in China, we find that the regional sense of social fairness will significantly increase the salary gap of companies, and the higher the sense of social fairness, the greater the incentive effect of the salary gap on the production efficiency of ordinary employees, and the correct match between the sense of social fairness and the salary gap will promote the development of the performance of local enterprises. This means that the cultural environment will deeply affect the micro-governance of enterprises. We should attach importance to the role of hidden factors in the executive-employee pay gap, promote the rationalization of the income distribution pattern, and promote the development of the economy stably.

The aim of this review is to stimulate discussion about a state-of-the-art understanding of per- 26 formance evaluation: namely, the taken-for-granted benefit of maximal reliable performance 27 evaluation, that is, the benefit of evaluating employees’ performance with high reliability 28 (i.e., large (vs. small) samples of performance observations). So far, the management disci- 29 pline has ignored the evidence-based view that one’s performance is better under unreliable 30 compared to reliable performance evaluation. Drawing on tournament theory, behavioral re- 31 search and real-world sport data, we argue that while reliable performance evaluation boosts 32 only superior employees, unreliable performance evaluation boosts all employees. The mech- 33 anisms that drive inferior and superior employees to perform better when evaluated unrelia- 34 bly substantiate that psychological insight is essential for efficient performance management. 35 Overall, we complement the predominant thinking of performance management by offering 36 innovative insights and implications that are significant for academics as well as for employ- 37 ees and employers.

PurposeWhile there have been extensive empirical investigations of pay-performance sensitivity, the perspective of performance-pay has received less attention to date. While executive compensation is sensitive to firm performance, firm performance is also likely to be affected by executive compensation. Adopting multiple theoretical perspectives, the purpose of this paper is to examine whether executive compensation has a greater influence on firm performance or whether the latter has a greater influence on compensation.Design/methodology/approachUsing data from a five-year period (2010-2014) for Financial Times and Stock Exchange 350 companies, the authors employ a set of simultaneous equation modelling to jointly investigate, after accounting for endogeneity problem, the mutual association of executive compensation and firm performance by employing four control variables (board size, non-executive directors, leverage and boardroom ownership).FindingsThe authors find strong evidence for the greater influence of executive compensation on firm performance than the pay-performance framework. This finding supports the tournament theory compared with the agency perspective.Research limitations/implicationsInevitably, there are limitations in a wide-ranging study of this nature that could be addressed in future research. As any empirical study utilising company data, there may be concerns to the effect of survivorship bias and the manner in which companies have reorganised, if there is any, themselves during the period under examination. There are also issues as to missing data, some measures relating to both executive compensation and corporate governance are not provided by the BoardEx database.Practical implicationsThe study results provide evidence that using the tournament perspective by remuneration committees as a guide for determining executive compensation helps in achieving better performance. This helps in developing appropriate mechanisms for setting executive remuneration.Originality/valueThis paper combines an empirical investigation of the frameworks of pay-performance and performance-pay and develops a system of six simultaneous equations to examine the associations between executive compensation and firm performance.

Greater vertical pay disparity is associated with compensation schemes that reward relative performance. Considering tournament theory as a leading framework for those schemes, along with boosting productivity, they are likely to increase workers’ willingness to exert effort at the risk of injuries or occupational sickness. We find evidence of such pervasive effect on a novel database that includes more than 110,000 Chileans firms. For workers in the bottom half of the wage distribution, an increment of one standard deviation in within-firm vertical pay disparity is associated with an increase of around 10% in the number of injuries and almost 19% in the number of days lost. These results are negatively moderated by the proportion of female employees and state ownership.

Purpose The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members. Design/methodology/approach Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity. Findings The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity. Practical implications The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members. Originality/value This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components.

Tournament theory posits that some organizations are modeled after sports tournaments whereby individuals are incentivized to compete and win against other members of the organization. A persistent criticism of tournament theory is that rank-order success of employees is entirely dependent onnon-interactingor at least non-cooperating entities. To address what part, if any, cooperation plays in competitive tournaments, this study examines the role of social networks in tournament-style promotion and reward systems. Specifically, we seek to identify the importance of social relationships, such as group dissimilarity, initial tie formation, and tie strength in predicting tournament success. Bringing two largely independent research streams together (one focused on cooperation and one framed around competition), we examine how individuals’ performance interacts with their social relationships—their social networks—to influence their chances of winning a tournament. Using the Survivor television series, we analyze the behaviors of 535 interacting contestants across 30 tournaments. In general, the findings help to illustrate how performance and social networks predict tournament advancement. Interestingly, we find that group dissimilarity based on gender, race, and age, largely does not play a role in advancement in the tournaments. Further, the strength of ties fails to mediate between variables such as group dissimilarity and initial tie formation. We conclude by discussing future directions for theoretical and practical exploration of tournament-style promotion systems. Recommendations include continuing to explore and test the role of social dynamics in compensation and promotion systems.

Vertical pay dispersion (VPD), a hierarchical pay structure used to motivate employees, has traditionally been studied separately from high-performance work systems (HPWSs). As a component of HPWSs, incentive-based compensation schemes focus on employee- or team-level incentives. However, the influence of the simultaneous utilization of VPD and HPWS on performance remains understudied. This study addresses the question of whether these approaches to managing human capital serve as complements or substitutes to one another. VPD and HPWS are argued to substitute for one another with respect to motivation- and skill-enhancing practices. The opposite notion is true in regard to opportunity-enhancing HPWSs, which serve to amplify the effectiveness of VPD. In a multisource, longitudinal sample of South Korean firms, the hypothesized predictions are supported.

Although the pay gap between executives and employees has received considerable attention, its economic consequences remain unclear due to the unavailability of data. In this study, we examine the effects of the pay gap on firm innovation by using data from Chinese listed firms. We show that: 1) the first-order effect of pay gap on firm innovation is significantly positive, supporting the tournament theory; 2) however, when pay gap is relatively high, the importance of comparison theories increases; 3) high management pay premiums provide incentives for management to devote to innovation activities, while pay premiums for ordinary employees impede firm innovation; and 4) both the employee's human capital and state ownership play significant roles in the negative effects of employee pay premiums on firm innovation. Overall, we provide critical insights and a serious challenge for regulators in China. The policy implications of this study could be of interest to regulators who intend to encourage firm innovation.

Using a cross-country sample, we examine the chief executive officer (CEO) tournament structure (measured alternatively as the ratio and the difference of pay between the CEO and other top executives within a firm). We find the tournament structure to vary systematically with firm and country cultural characteristics. In particular, firm size and the cultural values of power distance, fair income differences, and competition are significantly associated with variations in tournament structures. We also establish support for the primary implication of tournament theory in that tournament structure tends to be positively related to firm value, even after controlling for endogeneity.

This paper develops a novel field experiment to test the implicit prediction of tournament theory thatcompetition increases work time and can therefore contribute to the long work hours required in eliteoccupations. A majority of workers in the treatment without explicit financial incentives worked pastthe minimum time, but awarding a tournament prize increased work time and effort by over 80% andlowered costs of effort or output by over a third. Effort was similar with alternative (piece rate, low-prizetournament) bonuses. Men worked longer than women in the high-prize tournament, but for the sameduration in other treatments.

Chronic excessive turnover among information technology (IT) professionals has been costly to firms for decades with annual turnover rates as high as 24% even among Computerworld’s “100 Best Places to Work in IT.” Prior information systems literature has identified two key factors affecting turnover: boundary-spanning roles and low promotability in one’s current firm. We draw on tournament theory, which is primarily concerned with inducing effort in employees, to decompose promotability into two distinct constructs: the likelihood of promotion and benefit from promotion, and demonstrate that each has a distinct role in affecting turnover rates. Our key result is that a job ladder motivating IT professionals with large, infrequent promotions will lead to higher turnover than a job ladder with smaller, more frequent promotions. We describe the conditions under which rearranging the job ladder creates economic value for the firm. We also offer an explanation for the observation that jobs characterized by boundary-spanning activities have higher turnover, and show that such jobs are more sensitive to the effect of likelihood of promotion on turnover. We test our hypotheses on a detailed data set covering 5,704 IT professionals over a five-year period. We confirm that likelihood of promotion has the predicted effects on turnover of IT professionals. A one standard deviation increase in likelihood of promotion decreases turnover by over 99%, consistent with our prediction. The empirical analysis also confirms the predicted effects of boundary spanning activities.

Research summary: Past inquiry has found that implementing complex competitive repertoires (i.e., diverse and dynamic arrays of actions) is challenging, but firms benefit from doing so. Our examination of the antecedents and outcomes of complex competitive repertoires develops a more nuanced perspective. Data from 1,168 firms in 204 industries reveal that complexity initially harms performance, but then becomes a positive factor, except at high levels. We use agency and tournament theories, respectively, to examine how key governance mechanisms—ownership structure and executive compensation—help shape firms' competitive repertoires. We find that the principals of agency theory and the pay gap of tournament theory are both important antecedents of competitive complexity, and an interaction exists wherein firms build especially complex repertoires when both influences are strong. Managerial summary: In boxing, the fight does not always go to the bigger or stronger person, or even to whomever throws the most punches—the fight is sometimes won by the boxer who is unpredictable, such as throwing an uppercut when the opponent expected a right hook. Similarly, when companies compete in the marketplace, advantage is afforded not only to those with more resources or who engage in more competitive activity, but also to those whose actions are unpredictable. In this study, we develop the notion of “competitive complexity,” which describes the diversity and changing nature of a company's competitive moves. Implementing complex competitive repertoires can be painful in the short term but, if done correctly, can help company performance in the long run. Copyright © 2016 John Wiley & Sons, Ltd.

This paper develops a novel field experiment to test the implicit prediction of tournament theory that competition increases work time and can therefore contribute to the long work hours required in elite occupations. A majority of workers in the treatment without explicit financial incentives worked past the minimum time, but awarding a tournament prize increased work time and effort by over 80% and lowered costs of effort or output by over a third. Effort was similar with alternative (piece rate, low-prize tournament) bonuses. Men worked longer than women in the high-prize tournament, but for the same duration in other treatments.