You Manage It! 4: Ethics/Social Responsibility The Pitfalls of Merit Pay and Pay for Performance

Merit Pay? For Whom?

Three recent studies suggest that the link between pay and performance may not always show in the pay checks of women and minorities. A joint study of nearly 200 British executives by the University of Exeter in Britain and Tilburg University in the Netherlands found when men and women with similar experience achieved improved results, the women were rewarded far less. Bonuses for men rose over 250 percent at poorly performing companies that began to improve, whereas bonuses for women rose an average of merely 4 percent. An MIT ...

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