Evaluating Form and Functionality of Pay-For-Performance Plans: The Relative Incentive and Sorting Effects of Merit Pay, Bonuses, and Long-Term Incentives

Using two-year longitudinal data from a large sample of US employees from a service-related organization, the present study investigates the relative effects of three forms of pay-for-performance plans on employees’ job performance (incentive effects) and voluntary turnover (sorting effects). The study differentiates between three forms of pay: merit pay, individual-based bonuses, and long-term incentives. By definition, these PFP plans have different structural elements that distinguish them from each other (i.e., pay plan form) and different characteristics (functionality), such as the degree to which pay and performance are linked and the size of the rewards, which can vary both within and across plan types. Our results provide evidence that merit raises have larger incentive and sorting effects than bonuses and long-term incentives in multi-PFP plan environments where the three PFP plans are operating simultaneously. Only merit pay has both incentive and sorting effects among the three PFP plans. The implications for the PFP-related theory, as well as for the design and implementation of PFP plans, are discussed.

On the endogeneity of the pay-performance relationship in professional soccer

In this reply we show that the Nüesch (2009) comment paper to our initial contribution (Torgler and Schmidt 2007) has several shortcomings. He suggests that professional soccer wages seem to buy talent rather than motivation. We therefore provide a larger set of talent proxies and estimations to check whether this assertion is correct. Our results indicate that his conclusion is problematic. We still observe a strong motivational effect, and in some cases the effect is even larger than the talent effect. A further key problem in Nüesch’s contribution is the fact that he neglects to consider the relevance of the relative salary situation.

Is CEO human capital related to firm performance?

The global economy experienced continuous growth from 2002 to 2007 until the U.S. subprime mortgage crisis caused instability in worldwide stock markets. Simultaneously, global CEO turnover continued to fall to 13.8 percent in 2007. In contrast, the CEO turnover rate in Australia increased to 18 percent in 2007. The purpose of this paper is to determine under what conditions a change in a CEO is associated with firm performance. Succinctly, does the firm’s decision to replace the CEO depend on the CEO’s human capital or firm performance? The empirical study of Australian listed firms (2005 – 2008) shows that firm performance is not a determinant of CEO turnover, rather a CEO with less valuable human capital is more likely to be replaced. The study also finds that merely changing the CEO is not associated firm performance. Rather, there is a positive association between firm performance and the successor’s general human capital for firms that replace the CEO. Specifically, it is the internal successor’s general human capital that is an important determinant of increasing firm performance. These results are important because they imply that CEO turnover is a result of a more active market for CEOs and contributes to explaining why firms retain CEOs despite poor firm performance.

Drinking and riding: is subjective workload related to performance?

Introduction: Within the context of road safety it is important that workload (the portion of a driver’s resources expended to perform a task) remains at a manageable level, preventing overloading and consequently performance decrements. Motorcyclists are over represented in crash statistics where the vehicle operator has a positive, low blood alcohol concentration (BAC) (e.g., 0.05%). The NASA task load index (NASA-TLX) comprises sub-scales that purportedly assess different aspects of subjective workload. It was hypothesized that, compared to a zero BAC condition, low BACs would be associated with increases in workload ratings, and decrements in riding performance. Method: Forty participants (20 novice, 20 experienced) completed simulated motorcycle rides in urban and rural scenarios under low dose BAC conditions (0.00%, 0.02%, 0.05% BAC), while completing a safety relevant peripheral detection task (PDT). Six sub-scales of the NASA-TLX were completed after each ride. Riding performance was assessed using standard deviation of lateral position (SDLP). Hazard perception was assessed by response time to the PDT. Results: Riding performance and hazard perception were affected by alcohol. There was a significant increase in SDLP in the urban scenario and of PDT reaction time in the rural scenario under 0.05% BAC compared to 0.00% BAC. Overall NASA-TLX score increased at 0.02% and 0.05% BAC in the urban environment only, with a trend for novices to rate workload higher than experienced riders. There was a significant main effect of sub-scale on workload ratings in both the urban and rural scenarios. Discussion: 0.05% BAC was associated with decrements in riding performance in the urban environment, decrements in hazard perception in the rural environment, and increases in overall ratings of subjective workload in the urban environment. The workload sub-scales of the NASA-TLX appear to be measuring distinct aspects of motorcycle riding-related workload. Issues of workload and alcohol impaired riding performance are discussed.

The impact of blur, illumination and distracters on tests related to driving performance

This thesis investigated a range of factors underlying the impact of uncorrected refractive errors on laboratory-based tests related to driving. Results showed that refractive blur had a pronounced effect on recognition of briefly presented targets, particularly under low light conditions. Blur, in combination with audio distracters, also slowed a participant's reactions to road hazards in video presentations. This suggests that recognition of suddenly appearing road hazards might be slowed in the presence of refractive blur, particularly under conditions of distraction. These findings highlight the importance of correcting even small refractive errors for driving, particularly at night.

Assessment of driving-related performance in chronic whiplash using an advanced driving simulator

Driving is often nominated as problematic by individuals with chronic whiplash associated disorders (WAD), yet driving-related performance has not been evaluated objectively. The purpose of this study was to test driving-related performance in persons with chronic WAD against healthy controls of similar age, gender and driving experience to determine if driving-related performance in the WAD group was sufficiently impaired to recommend fitness to drive assessment. Driving-related performance was assessed using an advanced driving simulator during three driving scenarios; freeway, residential and a central business district (CBD). Total driving duration was approximately 15 min. Five driving tasks which could cause a collision (critical events) were included in the scenarios. In addition, the effect of divided attention (identify red dots projected onto side or rear view mirrors) was assessed three times in each scenario. Driving performance was measured using the simulator performance index (SPI) which is calculated from 12 measures. z-Scores for all SPI measures were calculated for each WAD subject based on mean values of the control subjects. The z-scores were then averaged for the WAD group. A z-score of ≤−2 indicated a driving failing grade in the simulator. The number of collisions over the five critical events was compared between the WAD and control groups as was reaction time and missed response ratio in identifying the red dots. Seventeen WAD and 26 control subjects commenced the driving assessment. Demographic data were comparable between the groups. All subjects completed the freeway scenario but four withdrew during the residential and eight during the CBD scenario because of motion sickness. All scenarios were completed by 14 WAD and 17 control subjects. Mean z-scores for the SPI over the three scenarios was statistically lower in the WAD group (−0.3 ± 0.3; P < 0.05) but the score was not below the cut-off point for safe driving. There were no differences in the reaction time and missed response ratio in divided attention tasks between the groups (All P > 0.05). Assessment of driving in an advanced driving simulator for approximately 15 min revealed that driving-related performance in chronic WAD was not sufficiently impaired to recommend the need for fitness to drive assessment.

Impact of simulated hyperopia on academic-related performance in children

Purpose: To investigate the impact of simulated hyperopia and sustained near work on children’s ability to perform a range of academic-related tasks. Methods: Fifteen visually normal children (mean age: 10.9 ± 0.8 years; 10 males and 5 females) were recruited. Performance on a range of standardised academic-related outcome measures was assessed with and without 2.50 D of simulated bilateral hyperopia (administered in a randomised order), before and after 20 minutes of sustained near work, at two separate testing sessions. Academic-related measures included a standardised reading test (the Neale Analysis of Reading Ability), visual information processing tests (Coding and Symbol Search subtests from the Wechsler Intelligence Scale for Children) and a reading-related eye movement test (the Developmental Eye Movement test). Results: Simulated bilateral hyperopia and sustained near work each independently impaired reading, visual information processing and reading-related eye movement performance (p<0.001). A significant interaction was also demonstrated between these factors (p<0.001), with the greatest decrement in performance observed when simulated hyperopia was combined with sustained near work. This combination resulted in performance reductions of between 5% and 24% across the range of academic-related measures. A significant moderate correlation was also found between the change in horizontal near heterophoria and the change in several of the academic-related outcome measures, following the addition of simulated hyperopia. Conclusions: A relatively low level of simulated bilateral hyperopia impaired children’s performance on a range of academic–related outcome measures, with sustained near work further exacerbating this effect. Further investigations are required to determine the impact of correcting low levels of hyperopia on academic performance in children.

Simulated hyperopic anisometropia and reading, visual information processing, and reading-related eye movement performance in children

Purpose: This study investigated the impact of simulated hyperopic anisometropia and sustained near work on performance of academic-related measures in children. Methods: Participants included 16 children (mean age: 11.1 ± 0.8 years) with minimal refractive error. Academic-related outcome measures included a reading test (Neale Analysis of Reading Ability), visual information processing tests (Coding and Symbol Search subtests from the Wechsler Intelligence Scale for Children) and a reading-related eye movement test (Developmental Eye Movement test). Performance was assessed with and without 0.75 D of imposed monocular hyperopic defocus (administered in a randomised order), before and after 20 minutes of sustained near work. Unilateral hyperopic defocus was systematically assigned to either the dominant or non-dominant sighting eye to evaluate the impact of ocular dominance on any performance decrements. Results: Simulated hyperopic anisometropia and sustained near work both independently reduced performance on all of the outcome measures (p<0.001). A significant interaction was also observed between simulated anisometropia and near work (p<0.05), with the greatest decrement in performance observed during simulated anisometropia in combination with sustained near work. Laterality of the refractive error simulation (ocular dominance) did not significantly influence the outcome measures (p>0.05). A reduction of up to 12% in performance was observed across the range of academic-related measures following sustained near work undertaken during the anisometropic simulation. Conclusion: Simulated hyperopic anisometropia significantly impaired academic–related performance, particularly in combination with sustained near work. The impact of uncorrected habitual anisometropia on academic-related performance in children requires further investigation.

Simulated astigmatism impairs academic-related performance in children

Purpose: Astigmatism is an important refractive condition in children. However, the functional impact of uncorrected astigmatism in this population is not well established, particularly with regard to academic performance. This study investigated the impact of simulated bilateral astigmatism on academic-related tasks before and after sustained near work in children. Methods: Twenty visually normal children (mean age: 10.8 ± 0.7 years; 6 males and 14 females) completed a range of standardised academic-related tests with and without 1.50 D of simulated bilateral astigmatism (with both academic-related tests and the visual condition administered in a randomised order). The simulated astigmatism was induced using a positive cylindrical lens while maintaining a plano spherical equivalent. Performance was assessed before and after 20 minutes of sustained near work, during two separate testing sessions. Academic-related measures included a standardised reading test (the Neale Analysis of Reading Ability), visual information processing tests (Coding and Symbol Search subtests from the Wechsler Intelligence Scale for Children) and a reading-related eye movement test (the Developmental Eye Movement test). Each participant was systematically assigned either with-the-rule (WTR, axis 180°) or against-the-rule (ATR, axis 90°) simulated astigmatism to evaluate the influence of axis orientation on any decrements in performance. Results: Reading, visual information processing and reading-related eye movement performance were all significantly impaired by both simulated bilateral astigmatism (p<0.001) and sustained near work (p<0.001), however, there was no significant interaction between these factors (p>0.05). Simulated astigmatism led to a reduction of between 5% and 12% in performance across the academic-related outcome measures, but there was no significant effect of the axis (WTR or ATR) of astigmatism (p>0.05). Conclusion: Simulated bilateral astigmatism impaired children’s performance on a range of academic–related outcome measures irrespective of the orientation of the astigmatism. These findings have implications for the clinical management of non-amblyogenic levels of astigmatism in relation to academic performance in children. Correction of low to moderate levels of astigmatism may improve the functional performance of children in the classroom.

Rallying the troops or beating the horses? How project-related demands can lead to either high performance or abusive supervision

In today's high-pressure work environment, project managers are often forced to “do more with less.” We argue that this imperative can lead project managers to engage in either high-performance or abusive supervision behaviors. To understand this process, we develop a model and associated propositions linking a project manager's cognitive appraisal of project-related demands to high-performance work practices versus abusive supervision behaviors—both of which impact three project outcomes: stakeholder relationships, people-related project success factors, and employee well-being. We propose that the choice between high-performance work practices and abusive supervision behaviors is moderated by a project manager's personal resources (psychological capital, emotional intelligence, and dark triad personality).

Quantifying the heritability of task-related brain activation and performance during the N-back working memory task: A twin fMRI study

Working memory-related brain activation has been widely studied, and impaired activation patterns have been reported for several psychiatric disorders. We investigated whether variation in N-back working memory brain activation is genetically influenced in 60 pairs of twins, (29 monozygotic (MZ), 31 dizygotic (DZ); mean age 24.4 ± 1.7S.D.). Task-related brain response (BOLD percent signal difference of 2 minus 0-back) was measured in three regions of interest. Although statistical power was low due to the small sample size, for middle frontal gyrus, angular gyrus, and supramarginal gyrus, the MZ correlations were, in general, approximately twice those of the DZ pairs, with non-significant heritability estimates (14-30%) in the low-moderate range. Task performance was strongly influenced by genes (57-73%) and highly correlated with cognitive ability (0.44-0.55). This study, which will be expanded over the next 3 years, provides the first support that individual variation in working memory-related brain activation is to some extent influenced by genes.

Performance pay for Australian teachers: A critical policy historiography

In May 2011, the Australian Federal Education Minister announced there would be a unique, innovative and new policy of performance pay for teachers, Rewards for Great Teachers (Garrett, 2011a). In response, this paper uses critical policy historiography to argue that the unintended consequences of performance pay for teachers makes it unlikely it will deliver improved quality or efficiency in Australian schools. What is new, in the Australian context, is that performance pay is one of a raft of education policies being driven by the federal government within a system that constitutionally and historically has placed the responsibility for schooling with the states and territories. Since 2008, a key platform of the Australian federal Labor government has been a commitment to an Education Revolution that would promote quality, equity and accountability in Australian schools. This commitment has resulted in new national initiatives impacting on Australian schools including a high-stakes testing regime 14 National Assessment Program 13 Literacy and Numeracy (NAPLAN) 14a mandated national curriculum (the Australian Curriculum), professional standards for teachers and teacher accreditation 14Australian Institute for Teaching and School Leadership (AITSL) 14and the idea of rewarding excellent teachers through performance pay (Garrett, 2011b). These reforms demonstrate the increased influence of the federal government in education policy processes and the growth of a 1Ccoercive federalism 1D that pits the state and federal governments against each other (Harris-Hart, 2010). Central to these initiatives is the measuring, or auditing, of educational practices and relationships. While this shift in education policy hegemony from state to federal governments has been occurring in Australia at least since the 1970s, it has escalated and been transformed in more recent times with a greater emphasis on national human capital agendas which link education and training to Australia 19s international economic competitiveness (Lingard & Sellar, in press). This paper uses historically informed critical analysis to critique claims about the effects of such policies. We argue that performance pay has a detailed and complex historical trajectory both internationally and within Australian states. Using Gale 19s (2001) critical policy historiography, we illuminate some of the effects that performance pay policies have had on education internationally and in particular within Australia. This critical historical lens also provides opportunities to highlight how teachers have, in the past, tactically engaged with such policies.

Net radiation dynamics: performance of 20 daily net radiation models as related to model structure and intricacy in two climates.

We compared daily net radiation (Rn) estimates from 19 methods with the ASCE-EWRI Rn estimates in two climates: Clay Center, Nebraska (sub-humid) and Davis, California (semi-arid) for the calendar year. The performances of all 20 methods, including the ASCE-EWRI Rn method, were then evaluated against Rn data measured over a non-stressed maize canopy during two growing seasons in 2005 and 2006 at Clay Center. Methods differ in terms of inputs, structure, and equation intricacy. Most methods differ in estimating the cloudiness factor, emissivity (e), and calculating net longwave radiation (Rnl). All methods use albedo (a) of 0.23 for a reference grass/alfalfa surface. When comparing the performance of all 20 Rn methods with measured Rn, we hypothesized that the a values for grass/alfalfa and non-stressed maize canopy were similar enough to only cause minor differences in Rn and grass- and alfalfa-reference evapotranspiration (ETo and ETr) estimates. The measured seasonal average a for the maize canopy was 0.19 in both years. Using a = 0.19 instead of a = 0.23 resulted in 6% overestimation of Rn. Using a = 0.19 instead of a = 0.23 for ETo and ETr estimations, the 6% difference in Rn translated to only 4% and 3% differences in ETo and ETr, respectively, supporting the validity of our hypothesis. Most methods had good correlations with the ASCE-EWRI Rn (r2 > 0.95). The root mean square difference (RMSD) was less than 2 MJ m-2 d-1 between 12 methods and the ASCE-EWRI Rn at Clay Center and between 14 methods and the ASCE-EWRI Rn at Davis. The performance of some methods showed variations between the two climates. In general, r2 values were higher for the semi-arid climate than for the sub-humid climate. Methods that use dynamic e as a function of mean air temperature performed better in both climates than those that calculate e using actual vapor pressure. The ASCE-EWRI-estimated Rn values had one of the best agreements with the measured Rn (r2 = 0.93, RMSD = 1.44 MJ m-2 d-1), and estimates were within 7% of the measured Rn. The Rn estimates from six methods, including the ASCE-EWRI, were not significantly different from measured Rn. Most methods underestimated measured Rn by 6% to 23%. Some of the differences between measured and estimated Rn were attributed to the poor estimation of Rnl. We conducted sensitivity analyses to evaluate the effect of Rnl on Rn, ETo, and ETr. The Rnl effect on Rn was linear and strong, but its effect on ETo and ETr was subsidiary. Results suggest that the Rn data measured over green vegetation (e.g., irrigated maize canopy) can be an alternative Rn data source for ET estimations when measured Rn data over the reference surface are not available. In the absence of measured Rn, another alternative would be using one of the Rn models that we analyzed when all the input variables are not available to solve the ASCE-EWRI Rn equation. Our results can be used to provide practical information on which method to select based on data availability for reliable estimates of daily Rn in climates similar to Clay Center and Davis.

Job-related diversity and team performance: An empirical analysis of the US music industry

A significant amount of research has been carried out to investigate the existing bonds between team characteristics and team outcomes in contexts of social creativity. Specifically, how work group diversity affects its performance is of great relevance but unfortunately, there is no clear understanding of the diversity-performance relationship. Therefore, to improve our understanding of this phenomenon, it would be worthwhile to investigate further empirical settings. For this reason, we decided to study the music industry that, to our knowledge, has never been chosen as empirical setting for the application of the theoretical constructs linked to the topic of team diversity and performance. Our research aims at analyze the US music industry to study the relationship between job-related characteristics of team diversity and team performances.

Dispersal and related life history traits in the Glanville fritillary butterfly

Most studies of life history evolution are based on the assumption that species exist at equilibrium and spatially distinct separated populations. In reality, this is rarely the case, as populations are often spatially structured with ephemeral local populations. Therefore, the characteristics of metapopulations should be considered while studying factors affecting life history evolution. Theoretical studies have examined spatial processes shaping the evolution of life history traits to some extent, but there is little empirical data and evidence to investigate model predictions. In my thesis I have tried to bridge the gap between theoretical and empirical studies by using the well-known Glanville fritillary (Melitaea cinxia) metapopulation as a model system. The long-term persistence of classic metapopulations requires sufficient dispersal to establish new local populations to compensate for local extinctions. Previous studies on the Glanville fritillary have shown that females establishing new populations are not a random sample from the metapopulation, but they are in fact more dispersive than females in old populations. Many other life-history traits, such as body size, fecundity and lifespan, may be related to dispersal rate. Therefore, I examined a range of correlated traits for their evolutionary and ecological consequences. I was particularly interested in how the traits vary under natural environmental conditions, hence all studies were conducted in a large (32 x 26 m) outdoor population cage built upon a natural habitat patch. Individuals for the experiments were sampled from newly-established and old populations within a large metapopulation. Results show that females originating from newly-established populations had higher within-habitat patch mobility than females from old populations. I showed that dispersal rate is heritable and that flight activity is related to variation in a gene encoding the glycolytic enzyme phosphoglucose isomerase. Both among-individual and among-population variation in dispersal are correlated with the reproductive performance of females, though I found no evidence for a trade-off between dispersal and fecundity in terms of lifetime egg production or clutch size. Instead, the results suggest that highly dispersive females from newly-established populations have a shorter lifespan than females from old populations, and that dispersive females may pay a cost in terms of reduced lifetime reproductive success due to increased time spent outside habitat patches. In summary, the results of this thesis show that genotype-dependent dispersal rate correlates with other life history traits in the Glanville fritillary, and that the rapid turnover of local populations (extinctions and re-colonisations) is likely to be the mechanism that maintains phenotypic variation in many life history traits at the metapopulation level.