| By: |
Egon Franck;
Stephan Nüesch (Institute for Strategy and Business Economics, University of Zurich; Institute for Strategy and Business Economics, University of Zurich) |
| Abstract: |
The impact of intra-team pay dispersion on team productivity is a highly
discussed issue. On one hand, wage differentials provide incentives for higher
employee effort. On the other hand, pay inequality discourages cooperation
among team members, which reduces performance. Analyzing non-linear effects of
wage dispersion in professional team sports, we find empirical evidence that
an initial increase of intra-team inequity reduces team performance, but at
some point the relation reverses. In addition, we show that the pay structure
of a team clearly affects the teamÕs playing style. |
| Keywords: |
wage dispersion, team performance, relative deprivation, tournament theory |
| JEL: |
D31 L83 M52 |
| Date: |
2007 |
| URL: |
http://d.repec.org/n?u=RePEc:iso:wpaper:0073&r=spo |