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The Trade-Off Between Supervision Cost and Performance Based Pay: Does Gender Matter?

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  • Bradley Ewing
  • Phanindra Wunnava

Abstract

The study adds to the literature by providing new empirical evidence consistent with efficiency wage theory,and by providing estimates of the average cost of supervising a worker by industry. This research uses the 1996 wave of the NLSY and incorporates estimates of supervision cost computed from industry classifications. We further detect presence of no gender differences neither in risk-averseness nor in productivity gains associated with cost of supervision and performance-based pay. While the findings imply that employers should consider the incentive effects of supervision and performance based pay when constructing pay schemes, there is no need for employers to devote resources to constructing gender-specific payment mechanisms. Our evidence suggests that profit-maximizing firms should treat males and females equally and develop gender-neutral pay schemes. Copyright Kluwer Academic Publishers 2004

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  • Bradley Ewing & Phanindra Wunnava, 2004. "The Trade-Off Between Supervision Cost and Performance Based Pay: Does Gender Matter?," Small Business Economics, Springer, vol. 23(5), pages 453-460, December.
    • Handle: RePEc:kap:sbusec:v:23:y:2004:i:5:p:453-460
    DOI: 10.1007/s11187-004-7253-6
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    References listed on IDEAS

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    2. Sessions, John G., 2008. "Wages, supervision and sharing," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(4), pages 653-672, November.
    3. Harald Bergsteiner & Gayle Avery, 2012. "When Ethics are Compromised by Ideology: The Global Competitiveness Report," Journal of Business Ethics, Springer, vol. 109(4), pages 391-410, September.

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