Lamar Pierce, Olin Business School
Lamar Pierce, Olin Business School
TOM Seminar: Peer Bargaining and Productivity in Teams: Gender and the Inequitable Division of Pay - Lamar Pierce
TOM Seminar: Peer Bargaining and Productivity in Teams: Gender and the Inequitable Division of Pay - Lamar Pierce
15 Nov 201812:30 PM – 2:30 PM
Faculty and doctoral students only
Abstract:
A recent trend in organizational design is to reduce hierarchy and allow employee
teams to self-manage tasks, responsibilities, and rewards. Yet we know little about
the implications of this arrangement for worker productivity, pay equity, and organizational
performance. We provide the first firm-based evidence that when worker teams are allowed
to internally allocate compensation, the ensuing peer bargaining process can generate
inequitable outcomes for women. We demonstrate this using risk-adjusted fixed-effect
models to identify productivity and peer bargaining traits in 965 workers at 32 large
Chinese beauty salons. We measure individual productivity through service and card
sales and measure bargaining through the division of team-based commissions. We also
build a parsimonious bargaining model to explain the mechanisms driving our empirical
results. We find that although productivity and bargaining outcomes are positively
correlated, female workers consistently receive bargaining outcomes below their productivity
level, while men are consistently overcompensated. Importantly, we provide evidence
that our results can only be explained by a combination of higher prosociality and
lower bargaining power in women. Our findings provide unique organizational evidence
on how the delegation of pay authority generates bargaining among peers that might
impact firm operations and performance. Furthermore, we provide important evidence
that the discriminatory social dynamics observed throughout society are evident in
operational designs that delegate decision rights to teams. Managers seeking to implement
self-management by peers must anticipate the myriad of productivity, retention, and
ethical implications that can result when peer workers bargain over tasks and rewards.
Location:
Baker Library | Bloomberg Center 103
Organizer:
Lamar's research focuses on economic and psychological factors that impact both productivity and misconduct, and the organizational solutions to jointly address these effects. He teaches Strategic Management in the MBA and Executive MBA programs, as well as Business, Government, and Society to Executive MBA students and Ethics to government executives at the Brookings Institution.