Ignorer la navigation
Do Higher Wages Pay for Themselves?
Report

Do Higher Wages Pay for Themselves?

An Intra-Firm Test of the Effect of Wages on Employee Performance


résumé audio créé automatiquement
résumé audio créé automatiquement

Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Setting wage levels has always been tricky for employers, because gauging whether higher pay motivates employees to make a measurably positive impact on the bottom line is difficult. In this first-of-its-kind research report, academics James Hesford, Nicolas Mangin and Mina Pizzini draw significant conclusions about the connections among higher wages, productivity and profitability from a US hotel chain’s actual results. getAbstract recommends this scholarly study to anyone charged with making compensation-related decisions.

Take-Aways

  • Economists, sociologists and businesspeople have long debated theories about the costs versus the benefits of raising employees’ wages.
  • One theory is the “efficiency-wage hypothesis,” which posits that employers will lift pay to the point where the gain in worker productivity offsets the added wage cost.
  • Research on a US hotel chain shows that general managers’ performance on measures such as customer satisfaction, revenue and profits improved as wages rose.

About the Authors

James Hesford is an associate professor at the Ecole Hôtelière de Lausanne, where Nicolas Mangin is an assistant professor. Mina Pizzini is an associate professor at the Naval Postgraduate School in Monterey, California.