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Management Economics in a Large Retail Organization

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Author Info
Siebert, W. Stanley () (University of Birmingham, UK)
Zubanov, Nikolay () (CPB Netherlands Bureau for Economic Policy Analysis)

Additional information is available for the following registered author(s):

Abstract

We study the impact of and reward to middle management ability using data from 245 stores of a nationwide retailer. The company scores six broad areas of management practice, the most important of which turns out to be "commercial awareness", where able managers raise labour productivity by 17% compared to less able. We show that the managers' incentive scheme is implicitly an insurance one, with managers taking a share in deviations of actual sales from expected. At the same time, abler managers do not receive higher pay all else equal, which implies that middle management ability is not fully tradable.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3645.

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Length: 60 pages
Date of creation: Aug 2008
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Handle: RePEc:iza:izadps:dp3645

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Related research
Keywords: management firm behaviour business economics productivity compensation methods

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
M20 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - General
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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References listed on IDEAS
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This page was last updated on 2008-12-1.

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