Closing the Gender Pay Gap: New Approaches to an Old Problem

[We’re pleased to welcome author Kurt Stanberry, PLM Endowed Professor,
University of Houston–Downtown. Dr. Stanberry recently published an article in Compensation & Benefits Review entitled “Closing the Gender Pay Gap: New Approaches to an Old Problem,” which is currently free to read for a limited time. Below, Dr. Stanberry reflects on the motivation and challenges of this research:]

What motivated you to pursue this research

Compensation discrimination has been one of my favorite topics for my research over the past 25 years, which has included empirical research, discussing new court decisions, and looking at regulatory trends. I have followed the travails of pay equity legislation, its’ successes and mostly failures, and noticed a trend toward more regulation at the state level. I wanted to see what was happening around the nation on the pay equity front, since the basic law was passed over 50 years ago and yet women still face compensation equity challenges.

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

Yes, with the Republican sweep of the 2016 elections, the US has seen a shift from federal regulation to state regulation in terms of employment law. I wanted to see if the problems we face were simply going to go unaddressed, or if states would step up.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

Tracking down the law in fifty different states can be challenging.

What advice would you give to new scholars and incoming researchers in this particular field of study?

Expand employment-related research on the state level.

What is the most important/ influential piece of scholarship you’ve read in the last year?

I co-authored a new text in Business Ethics, published by Rice University and Open Stax, as part of an initiative to keep the cost of books down for students. Open Stax texts are 100% free to students.

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Call for Papers: Special Issue on Addressing the Wage & Wealth Gap

Compensation and Benefits Review is planning a special issue on “Addressing the Wage and Wealth Gap”. Articles should focus on, but are not limited to, whether capitalist institutions produce growing income inequality, fiscal policies that could address the wage gap, and CEO responsibility in mitigating wealth gaps.

Compensation & Benefits Review (CBR) is the leading journal for senior executives and professionals who design, implement, evaluate and communicate compensation and benefits policies and programs. The journal supports human resources and compensation and benefits specialists with up-to-date analyses on salary and wage trends, labor markets, pay plans, incentive compensation, retirement programs, and health care benefits.

For more details click here.

Manuscripts should be submitted electronically to http://mc.manuscriptcentral.com/cbr.

You will need to create an account in order to submit your manuscript. The system will notify you once we receive the manuscript and have sent it out for review.

Don’t forget to sign up for email alerts through the journal homepage so you never miss the latest research.

Modern Motivational Methods for Attracting and Retaining Employees

[We’re pleased to welcome authors Anaïs Thibault Landry of ESG UQAM,
Allan Schweyer of the Incentive Research Foundation, and Ashley Whillans of Harvard Business School. They recently published an article in Compensation & Benefits Review entitled “Winning the War for Talent: Modern Motivational Methods for Attracting and Retaining Employees,” which is currently free to read for a limited time. Below, they reflect on the motivation and impact of this research:]

Many companies remain structured – both in their organization and mindset – to address last century’s challenges. But nothing has changed more dramatically in recent decades than work and peoples’ attitudes toward it. The complexity of business combined with an inexorable need to innovate, require increasingly more sophisticated and nuanced approaches to attracting, engaging, and retaining talent. This research builds on past work of ours and many others, exploring the various ways non-financial benefits and rewards nurture stronger employer-employee relationships and better outcomes – both for the individual and the organization.

Like many today, we’re motivated to help solve the enormous challenges organizations face in an economy with almost zero unemployment among skilled workers, combined with stubbornly low employee engagement levels. We’ve been consistently surprised at the effects of certain “softer” rewards of work, especially those that convey a sense of caring. For example, when employers describe their generous leave policies in job descriptions, they attract many more candidates than firms that pay significantly more. Based only on the job description, candidates report they believe the employer cares more about their employees – and that’s worth more to them than extra money.

We think these findings are the most important and innovative of our research. For employers it means they now operate in a world where top talent is looking for more out of work than just a handsome paycheck. It means they should re-visit their approach to benefits and rewards by emphasizing flexible work, inclusion, purpose, autonomy and non-financial gifts that convey appreciation.

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Enhancing Return on Salesforce Investment

[We’re pleased to welcome back Pankaj M. Madhani, Associate Dean and Professor of ICFAI Business School (IBS). Dr. Madhani is the author of “Enhancing Return on Salesforce Investment: Reallocating Incentives and Training Resources With Intrinsic Valuation Approach,” which has been published in Compensation and Benefits Review and is currently free to read for a limited time. From Dr. Madhani:]

CBR_42_1_72ppiRGB_powerpoint

What motivated you to pursue this research

In view of escalating budget for sales incentives and training, it is important for sales organizations to optimally allocate these resources to enhance sales performance and retain their best salespeople. Retention of an employee is very important for organizations from the cost perspective. If the best salespeople are not retained, a firm can be negatively affected from the operational level to the strategic level. Owing to the significant investments made in the salesforce in terms of incentives and training, it is important to study the impact of such an investment on a salesperson’s performance. Traditionally, in most sales organizations, salesforce performance evaluation has mostly relied on reflective metrics such as sales volume, revenue, and manager’s evaluations of salesforce, and hence they have limited insight into how a salesperson will do going forward and what types of training and incentives will be most effective. Sales organizations should emphasize sustaining and improving their salesforce performance with strategic decisions about rewards and training optimization.

In what ways is your research innovative, and how do you think it will impact the field?

This research develops “Intrinsic Valuation Approach” and provides various decision frameworks for determining salesforce resource allocation. Optimizing a salesperson’s training and incentive resources according to “Intrinsic Valuation Approach” can improve sales performance. With such proactive approach, sales organizations not only identify a better salesperson but also realize why a salesperson’s profit potential (i.e., intrinsic value) is plateauing/decreasing while another salesperson’s intrinsic value is high. Research also emphasizes that all sales employees do not perceive organizational rewards and training alike because for some groups certain needs can be more prominent than others. A combination of incentives and training needs had the biggest impact on salespeople’s intrinsic value. Reallocation of incentives and training resources based on proactive approach developed in this paper not only reduces sales employee turnover but also enhances performance of retained employees because it takes into consideration the needs of the sales employees and the requirements of the organization.

What advice would you give to new scholars and incoming researchers in this particular field of study?

“Intrinsic Valuation Approach” is a predictive analytic that forecasts intrinsic value of salespeople. Such futuristic analysis provides the starting point for finding an answer to the salesforce resource allocation questions but there is need to empirically study interactions and interdependency of specific parameters such as:

1. What are the drivers of a salesperson’s future performance, and what is their impact?
2. Is there significant heterogeneity within the salesforce that affects intrinsic value?
3. What type of rewards and training will bring out the best in a high achiever or help a
promising sales employee improve?

Although, “Intrinsic Valuation Approach” links organizational factors (e.g., training and incentives), it does not investigate the role of the salesperson’s cognitive and attitudinal elements (e.g., motivation, ability /aptitude) that could mediate the effect between organizational variables
and intrinsic valuation. Hence, future research could study the mediating variables and adopt a dynamic model to describe the time-varying effects of the parameters in a more “continuous” sense, thereby building on this research stream.

 

 

Pankaj M. Madhani earned bachelor’s degrees in chemical engineering and law, a master’s degree in business administration from Northern Illinois University, a master’s degree in computer science from Illinois Institute of Technology in Chicago, and a PhD in strategic management from CEPT University. He has more than 30 years of corporate and academic experience in India and the United States. During his tenure in the corporate sector, he was recognized with the Outstanding Young Managers Award. He is now working as an associate dean and professor at ICFAI Business School (IBS) where he received the Best Teacher Award from the IBS Alumni Federation. He is also the recipient of the Best Mentor Award. He has published various management books and more than 300 book chapters and research articles in several refereed journals. He has received the Best Research Paper Award at the IMCON-2016 International Management Convention. He is a frequent contributor to Compensation & Benefits Review and has published more than 20 articles on sales compensation. His main research interests include salesforce compensation, corporate governance and business strategy. He is also editor of The IUP Journal of Corporate Governance.

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Enhancing Return on HR Investment

[We’re pleased to welcome back Pankaj M. Madhani, Associate Dean and Professor of ICFAI Business School (IBS). Dr. Madhani is the author of “Enhancing Return on HR Investment: Risk Management With Real Options Approach” which has been published in Compensation and Benefits Review and is currently free to read for a limited time. From Dr. Madhani:]

CBR_42_1_72ppiRGB_powerpointWhat motivated you to pursue this research?

For any organization, human resources (HR) are assets that can provide value and competitive advantage; however, such assets have associated uncertainties and risks. There is growing recognition that one of the key risks in a business is related to management of HR. As HR inherently involves a level of uncertainty, and as risk management’s main focus is uncertainty, forging the two fields of risk management and HR is important. Returns on HR investment may not remain stable over time for organizations due to changes in business conditions. The ability of the organizations to operate flexibly in dynamically changing business conditions is crucial on the long run. The “real options” approach enables organizations to evaluate investment opportunities of HR in uncertain environments and highlights how these investments create value through future choices (i.e., options). Research applies this logic to analyze the uncertainties associated with HR assets in organizations and discuss how organizations manage these uncertainties through HR “options,” which are capabilities generated by some HRM practices and their combinations.

In what ways is your research innovative, and how do you think it will impact the field?

The research emphasizes role of HR options in hedging HR related risks and uncertainties and provides risk management guidelines to practicing managers for enhancing return on HR investment. Extending the concept of real options, the research underlines certain HRM practices as creating HR options in terms of reducing uncertainties related to returns, volume and combinations and costs. The value of HR options lies in allowing the organizations to respond proactively to the uncertainties of human assets. HR options enable the organizations to develop and deploy human capital in order to limit downside risk caused by environmental uncertainty and create opportunities for greater returns in the future. In this research, various types of options, such as switching options, growth options, learning options, timing options, scaling options and turnover and productivity HR options are developed. Deployment of such HR options creates a strategic organizational capability to adapt to future contingent events and flexibly manage risks and uncertainties associated with investments in HR. Research also provides various real-life illustrations of such successful deployment of HR options in organizations.

What advice would you give to new scholars and incoming researchers in this particular field of study?

HR options may manage more than one type of risks and have synergistic effects when they act in “bundles” of multiple interacting options. However, when there is no synergy among various HR options related to different types of uncertainty, such as uncertainty of returns, volume and combinations and costs, it results in suboptimal performance. In this scenario, hedging one type of uncertainty will increase other related uncertainties (e.g., managing uncertainty of volume and combinations may lead to increased uncertainty of costs). Thus, there is need to study interactions and interdependency of various HR options to mitigate overall risks, quantify numerically each of the investment options and  investigate the linkage between deployment of HR options and the organization’s operational and financial performance.

 

Pankaj M. Madhani earned bachelor’s degrees in chemical engineering and law, a master’s degree in business administration from Northern Illinois University, a master’s degree in computer science from Illinois Institute of Technology in Chicago, and a PhD in strategic management from CEPT University. He has more than 30 years of corporate and academic experience in India and the United States. During his tenure in the corporate sector, he was recognized with the Outstanding Young Managers Award. He is now working as an associate dean and professor at ICFAI Business School (IBS) where he received the Best Teacher Award from the IBS Alumni Federation. He is also the recipient of the Best Mentor Award. He has published various management books and more than 300 book chapters and research articles in several refereed journals. He has received the Best Research Paper Award at the IMCON-2016 International Management Convention. He is a frequent contributor to Compensation & Benefits Review and has published more than 20 articles on sales compensation. His main research interests include salesforce compensation, corporate governance and business strategy. He is also editor of The IUP Journal of Corporate Governance.

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Optimal Salesforce Sizing and Compensation Cost

[We’re pleased to welcome back Pankaj M. Madhani, Associate Dean and Professor of ICFAI Business School (IBS).  Dr. Madhani is the author of “Optimal Salesforce Sizing and Compensation Cost: A Mathematical Approach” which appeared in Compensation and Benefits Review and is currently free to read for a limited time. From Madhani:]

CBR_42_1_72ppiRGB_powerpointWhat motivated you to pursue this research?

Each year businesses across the globe spend a massive amount on salesforce investment. The salesforce is the engine that drives not only revenue of organizations but also represents a large percentage of total costs for sales organizations. As such salesforce is a sales generator as well as a cost generator. Deciding on the proper size of the salesforce is a strategic management issue because it has major impact on sales organization’s revenues, cost and profits. A properly sized salesforce maximize the economic return on investment of selling resources. Determining the most appropriate salesforce size is dependent on a number of factors, such as stages of business life cycle, the use of selling partners, sales carryover rate, productivity of salesforce, and turnover of the sales staff. Hence, looking into complexity and interdependency of these issues, there is need of an analytical model to estimate optimal salesforce size.

In what ways is your research innovative, and how do you think it will impact the field?

Salesforce is one of the most important strategic levers for improving growth, market share, and profitability of sales organizations. However, sales organizations often use decision rules that rely on common sense rather than precise analytics to determine how large their salesforce should be. This research provides an analytical model for practicing managers to determine optimal size of salesforce based on a three-year ROI. This model eliminates two most common errors i.e. type I and II errors and thus help sales organizations make good salesforce sizing decisions. Type I error refers to over sizing error while type II error refers to under sizing errors. With use of the model, salesforce sizing errors could be avoided to boost top line as well as bottom line performance of sales organizations. The model developed in this research mathematically calculated ROI for different break-even ratios and across various levels of sales carry over. This relationship provides a valuable criteria check of whether a salesforce may be undersized, oversized or optimally sized.

What advice would you give to new scholars and incoming researchers in this particular field of study?

With optimal salesforce sizing decision, organizations could improve their performance by changing their salesforce size at a right time. Yet, there are many internal and external factors impacting sizing decisions such as strategic objectives, product maturity, competitive environment, market trends and financial goals. All these factors together determine optimal ROI for salesforce investment. Thus, there is need to empirically establish relationship among these factors to identify mediating variables.

Pankaj M. Madhani earned bachelor’s degrees in chemical engineering and law, a master’s degree in business administration from Northern Illinois University, a master’s degree in computer science from Illinois Institute of Technology in Chicago, and a PhD in strategic management from CEPT University. He has more than 30 years of corporate and academic experience in India and the United States. During his tenure in the corporate sector, he was recognized with the Outstanding Young Managers Award. He is now working as an associate dean and professor at ICFAI Business School (IBS) where he received the Best Teacher Award from the IBS Alumni Federation. He is also the recipient of the Best Mentor Award. He has published various management books and more than 300 book chapters and research articles in several refereed journals. He has received the Best Research Paper Award at the IMCON-2016 International Management Convention. He is a frequent contributor to Compensation & Benefits Review and has published more than 20 articles on sales compensation. His main research interests include salesforce compensation, corporate governance and business strategy. He is also editor of The IUP Journal of Corporate Governance.

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Big-Science Organizations as Lead Users: A Case Study of CERN

switzerland-93275_1920[We’re pleased to welcome authors Poul Andersen of Aalborg University, Denmark and Susanne Åberg of Uppsala University, Sweden. Andersen and Åberg recently published an article in the Competition and Change entitled “Big-science organizations as lead users: A case study of CERN,” which is currently free to read for a limited time. Below, Andersen reflects on the inspiration for conducting this research:]

ccha_21_3.coverWhat kind of customer is CERN – the leading research organization for nuclear research in Europe – and what can a supplier learn from collaborating with them? In this paper we pursue questions that was originally raised by Susanne Åberg – one of the authors – during her study of collaboration between CERN and Swedish suppliers (see Åberg, S. (2013). Science in business interaction: A study of the collaboration between CERN and Swedish companies (Doctoral dissertation, Företagsekonomiska institutionen, Uppsala Universitet. The dissertation can be downloaded, using this link:  http://www.diva-portal.org/smash/get/diva2:575589/FULLTEXT01.pdf).

In the paper, forthcoming in Competition and Change, we pose the question: What characterizes interacting with big-science organizations as lead users and how does it impact on suppliers’ potential innovation benefits?

We depart from Von Hippel’s Lead user concept to scrutinize user-supplier interaction and learning. We find that the lead-userness of CERN differs from other lead users on a number of vital points. Big-science organizations (BSOs), such as CERN represent a special breed of lead users as their demands are not necessarily the avant-garde of a coming market. Yet, they may be leading in other ways: they provide a valuable test bed for suppliers, because they are pushing the boundaries of technological capacities and thus challenging suppliers’ talents. Also, they are prestigious collaboration partners that help producers to be acknowledged as being at the technology forefront. Moreover, they are often deeply engaged in their suppliers’ manufacturing and development activities, which is seen as a characteristic of the customer-active paradigm, upon which the lead user notion builds. This paper investigates whether and how interacting with CERN concerning their development needs may contribute to suppliers’ innovation.

We believe that both managers and designers of innovation policy may learn from our study. Viewing CERN and other BSOs as lead users change the traditional science-push perspective on knowledge dissemination from leading science. Managers considering engaging with CERN and other BSOs can also learn more about potential benefits and challenges from engaging with customers such as CERN.

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