Explaining wage inequality in telecommunications services: Customer segmentation, human resource practices, and union decline.

This study examines factors related to within-occupation wage inequality among service and sales workers in the telecommunications industry. The author draws on a 1998 survey of a nationally representative sample of 354 service and sales centers in the industry to examine the relative importance of management practices and union institutions in shaping wage variation. The results strongly indicate that the design of work, technology, and incentives explains variation in wages over and above that explained by the skills of the work force, suggesting that these factors are important determinants of the efficiency with which existing human capital is harnessed. After controlling for markets, organizational characteristics, and other variables, the author finds that business strategy explains about 19% of wage variation; measures of human capital, 18%; and variation in the use of technology and human resource practices, 7.3%. The union wage premium is 22%. (Author's abstract.)