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How to pay top executives if you want them to be innovative

https://www.eurekalert.org/pub_releases/2019-02/bu-htp021219.php
See More From: eurekalert.org   ( Science & Technology )

Feb 12, 2019 12:00 AM 2+ mon ago

How to pay top executives if you want them to be innovative

Dispersion in executives' fixed pay drags innovation, whilst dispersion in their variable pay boosts it, according to a study by scholars from Bocconi University and University of Bath

When pay dispersion is perceived as linked to an executive's individual performance (as in variable pay), it's considered legitimate and may promote knowledge-sharing and cooperation among top executives. On the contrary, when pay dispersion is not perceived to depend on individual contribution (as in fixed pay), it ignites a demotivating process of social comparison, detrimental to knowledge sharing and cooperation.

That's why high dispersion in variable top executives' pay implies more innovation, while dispersion in fixed pay compromises it, according to a study by Mario Daniele Amore, an Associate Professor of Management and Technology at Bocconi University, Milan, ...

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Mario Daniele Amore  Bocconi University  innovation output  incentivizing device  antithetic effects  British Journal  Virgilio Failla  Associate Professor  demotivating process  whilst dispersion  innovation need  
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