Personnel economics assignment week 5
Assignment executive pay:
a. What is the growth rate of the salaries of the CEO’s of large public corporations between 1980 and 2004 according to Pittinsky and DiPrete? What is the growth rate of the compensation of executives in the 30 year period prior ...
a what is the growth rate of the salaries of the ceo’s of large public corporations between 1980 and 2004 according to pittinsky and di
Written for
Rijksuniversiteit Groningen (RuG)
Msc Human Resource Management
Personnel Economics (EBM678A05)
All documents for this subject (12)
Seller
Follow
NeginAhmadifard
Reviews received
Content preview
Assignments Lecture 5 on Personnel Economics 2016-2017
Cijfer/Grade: 6
Assignment executive pay:
a. What is the growth rate of the salaries of the CEO’s of large public corporations
between 1980 and 2004 according to Pittinsky and DiPrete? What is the growth rate
of the compensation of executives in the 30 year period prior to the mid-1970’s? How
developed CEO salaries according to van Veen and Wittek? Has this changed in
recent years? What does it do to work morale (Cornelißen, Himmler and Koenig)?
In recent years the salaries of the CEO’s have increased enormously in comparison to the
other wages of the employees. According to Pittinsky & DiPrete (2013) between 1980 and
2004, the adjusted average compensation of a CEO at a large public corporation in the United
States rose from $625,000 to $9,840,000. Which was a growth rate of 12.2%. In contrast to
this Pittinsky & DiPrete (2013) stated that during the 30-year period prior to the mid-1970s,
median executive compensation is thought to have generally remained flat.
In addition to what Pittinsky & DiPrete (2013) had mentioned, Veen & Wittek (2015) also
state that since the beginning of the 1980s, CEO compensation levels have risen dramatically
in both absolute and relative numbers. Veen & Wittek (2015) also mentioned that the CEO
compensation levels were quite stable in the period 1940–1970 and after that, they quickly
started to rise, and they have continued to do so until today.
According to Cornelißen et al., (2011) excessively high paid executives have a negative
impact on work morale. Individuals compare their effort-to-pay-ratio to that of others and
adjust it whenever they differ and this might lead to workers to decrease their own efforts.
(Cornelißen et al., 2011). Perceiving the CEO compensation as unfair has consequences for
the employees. For instance, Cornelißen et al., (2011) stated that it results in 20% higher
levels of absenteeism. It also has negative effects on well-being. According to Cornelißen et
al., (2011) higher income of a reference group affects subjective well-being negatively.
1
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller NeginAhmadifard. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.90. You're not tied to anything after your purchase.
