Please use this identifier to cite or link to this item: https://doi.org/10.1108/00483481211212742
Title: Is there fire? Executive compensation and employee attitudes
Authors: Welsh, E.T.
Ganegoda, D.B.
Arvey, R.D. 
Wiley, J.W.
Budd, J.W.
Keywords: Employees attitudes
Executive compensation
Job satisfaction
Issue Date: 2012
Source: Welsh, E.T., Ganegoda, D.B., Arvey, R.D., Wiley, J.W., Budd, J.W. (2012). Is there fire? Executive compensation and employee attitudes. Personnel Review 41 (3) : 260-282. ScholarBank@NUS Repository. https://doi.org/10.1108/00483481211212742
Abstract: Purpose: This paper aims to examine the relationship between CEO compensation and employee attitudes. Design/methodology/approach: Based upon equity/organizational justice theories and the CEO compensation literature, hypotheses were developed which suggest that executive compensation and employee attitudes will be related. These hypotheses were tested by linking a large-scale survey of employee attitudes to CEO compensation data for public companies based in the USA. Findings: Employee attitudes appear to be related to some measures of CEO compensation, although sometimes the relationship that was found was negative and sometimes it was positive, but in all cases the effect size was quite small. Specifically, change in CEO salary was negatively related to evaluation of senior management and general satisfaction. However, change in total CEO compensation was positively related to evaluation of senior management and general satisfaction, while CEO bonus level was positively related to general satisfaction. Research limitations/implications: Limitations of this study include the inability to show a causal relationship, limited external validity, equations that explain only a small amount of variance and attitudinal measures that are single source. Future research which helps understand what employees know and why differences across organizations exist would be helpful. Practical implications: From an employee attitude perspective, changing performance-based components of CEO compensation (e.g. bonus) is better than changing CEO salary. However, if salary is going to be increased, a communication plan for employees should be developed. Originality/value: Whether executive compensation has an impact on employees' attitudes has not been explored previously. © Emerald Group Publishing Limited.
Source Title: Personnel Review
URI: http://scholarbank.nus.edu.sg/handle/10635/44552
ISSN: 00483486
DOI: 10.1108/00483481211212742
Appears in Collections:Staff Publications

Show full item record
Files in This Item:
There are no files associated with this item.

SCOPUSTM   
Citations

2
checked on Dec 7, 2017

WEB OF SCIENCETM
Citations

1
checked on Nov 22, 2017

Page view(s)

81
checked on Dec 10, 2017

Google ScholarTM

Check

Altmetric


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.