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Show Me the Money! Pay Structure and Individual Performance in Golden Teams

Authors


  • The authors are listed in alphabetical order. All authors contributed equally to the paper.

Abstract

Using the Italian Serie A football league as an example, we analyse the unresolved relationship between pay structure and individual performance in organizational golden team settings, namely, groups of interdependent high-skilled, high-paid employees. We contribute to existing compensation literature by focusing on individual (rather than collective) performance, considering both absolute and relative (within team-within role) pay structures, and investigating the moderating role of pay dispersion in the relationship between pay level and performance. Our analysis confirms the complexity of the understanding of the effects of pay structures on individuals. Specifically, both (absolute and relative) pay level and pay dispersion have a positive impact on the individual performance. However, when absolute and relative pay levels are jointly considered, only the latter displays a significant impact. Moreover, because of its direct positive relationship with individual performance, absolute (and relative) pay dispersion shows to have a partial substituting effect on the impact of absolute (and relative) pay on individual performance. The theoretical and managerial implications of our results and the issue of the extendibility of the findings to non-sport organizations are discussed.

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