Salary and Decision Making: Relationship Between Pay and Focus on Financial Profitability and Prosociality in an Organizational Context

Authors

  • Jennifer M. Jordan

    Corresponding author
    1. Faculty of Economics and Business
      University of Groningen
      Groningen, The Netherlands
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    • The author thanks Yale University and the Tuck School of Business at Dartmouth College for supporting this project. A special thanks goes to Anthony Bukalew and Prometheus Research.


Jennifer Jordan, Faculty of Economics and Business, University of Groningen, Dept. HRM/OB, Postbus 800, 9700 AE Groningen, The Netherlands. E-mail: j.jordan@rug.nl

Abstract

This investigation examined the relationship between organizationally based financial incentives and a focus on profit vs. prosociality during decision making. Participants were 84 managers from a Fortune 200 corporation. Managers read a vignette containing a dilemma and freely generated issues that they considered important in resolving the dilemma. These responses were coded for their inclusion on 3 dimensions: financial profitability, well-being of nonpowerful stakeholders, and legal culpability. The results demonstrated that salary level predicted an increased focus on the dimension related to financial profitability and decreased focus on the dimensions of prosociality and legal concerns. Implications of these findings and future directions for research are discussed.

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