Pay dispersion and organizational innovation: The mediation effects of employee participation and voluntary turnover

Building on social comparison theory, we posit that a firm’s pay dispersion affects its innovation through employee participation and voluntary turnover. By analyzing data collected at both employee and organizational levels from 1419 firms, we found that pay dispersion had an inverted U-shaped effe...

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Bibliographic Details
Published inHuman relations (New York) Vol. 68; no. 7; pp. 1155 - 1181
Main Authors Wang, Taiyuan, Zhao, Bin, Thornhill, Stewart
Format Journal Article
LanguageEnglish
Published London, England SAGE Publications 01.07.2015
SAGE PUBLICATIONS, INC
Subjects
Employee involvement
Employee turnover
Inequality
Innovations
Mediation
Studies
Wages & salaries
organizational innovation
employee participation
voluntary turnover
pay dispersion
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Summary:Building on social comparison theory, we posit that a firm’s pay dispersion affects its innovation through employee participation and voluntary turnover. By analyzing data collected at both employee and organizational levels from 1419 firms, we found that pay dispersion had an inverted U-shaped effect on employee participation, which in turn enhanced innovation. Pay dispersion had a positive effect on voluntary turnover, which in turn impaired innovation. These findings contribute to research on economic inequity by revealing the mediation mechanisms of employee participation and voluntary turnover in the relationship between pay dispersion and organizational innovation.
ISSN:0018-7267
1741-282X
DOI:10.1177/0018726715575359