Performance, seniority and wages : formal salary systems and individual earnings profiles

This paper replicates studies by Medoff and Abraham (1980, 1981) and Flabbi and Ichino (2001) using personnel data from the Dutch national aircraft manufacturer Fokker. It shows how a formal salary system, as is widely used by large firms, brings about that seniority-wage profiles are largely independent of controls for reported performance in cross-sectional wage regressions even though supervisors' evaluations shape life-cycle earnings profiles. Performance ratings determine how fast a worker climbs the firm's career and wage ladder. The paper also reveals that real wage growth depends on the employer's prosperity. Furthermore it demonstrates that formal salary systems cause serial correlation in wage growth and 'Green Card' effects.

MoreLess

Year of publication:	2003
Authors:	Dohmen, Thomas J.
Publisher:	Bonn : Institute for the Study of Labor (IZA)
Subject:	Vergütungssystem \| Betriebszugehörigkeit \| Interner Arbeitsmarkt \| Leistungsorientierte Vergütung \| Personalbeurteilung \| Luftfahrtindustrie \| Niederlande \| Koninklijke Nederlandse Vliegtuigenfabriek, Fokker Amsterdam \| formal salary systems \| returns to seniority \| internal labor markets \| personnel economics

More details

Series:	IZA Discussion Papers ; 935
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	374500258 [GVK] hdl:10419/20172 [Handle]
Classification:	M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs) ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J30 - Wages, Compensation, and Labor Costs. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010261640