Human Capital Management

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Pay and Performance Management

Pay Transparency and the Gender Pay Gap

Compensation is a core process to motivate, develop, and control employees in organizations. However, it also contributes to the rising inequality and pay gaps observed in many (Western) societies. In this field, we take a multisource approach, and analyze the effectiveness of pay transparency regulations (the German "Entgelttransparenzgesetz"), employee preferences for and perceptions of pay fairness, and cooperative and competitive behaviors, both in the field and in the lab. Our research is supported by a 2.5 years grant of the German Research Foundation (“Deutsche Forschungsgemeinschaft”, DFG project 416607985: “Die Auswirkungen von Entgelttransparenz auf Beschäftigte, Betriebe und den Gender Pay Gap“).

Executive Compensation

Executive compensation is another hot topic in research on pay, especially because views differ greatly regarding the appropriateness of executive pay levels. The literature focuses on different parts of the pay setting process, for instance on the role of consultants, on how the Board of Directors shapes executive pay, or on the relation between pay and performance. Based on rich panel data, our research examines the role of compensation and performance peer groups for executive pay and performance processes.

Compensation Complexity and Communication

Compensation consists of a multitude of elements – base salary, variable pay, pensions, and insurance, as well as other benefits – often referred to as total rewards. One major characteristic of both the elements themselves and their interplay as a total rewards system is complexity (e.g. measurability, uncertainty, ambiguity). Employees, however, face limitations in their capacity to rationally evaluate and interpret the intended goals and values of complex reward systems, which, in turn, potentially undermines their effectiveness. We study communication as an organizational mechanism that affects complexity and the perception of complexity in total rewards systems.

Performance Management

While Performance Management (PM) is subject to debate, change, frustration and emotion in academia and practice alike, it is one of the most important and prevailing HR processes. A frequent subject of discussion is the mode of performance assessment as well as the role of transparency and accountability for attenuating PM related biases and challenges. We are particularly interested in the roles of transparency and accountability in PM. Our research aims at illuminating these roles conceptually and empirically.

Major publications in this research area:

Gerhart, B., & Weller, I. (2018). Compensation. In A. Wilkinson, N. Bacon, D. Lepak, & S. Snell (Eds.), The Handbook of Human Resource Management (forthcoming). London: Sage, 2nd Edition.

Giarratana, M., Mariani, M., & Weller, I. (2018). Rewards for patents and inventor behaviors in R&D. Academy of Management Journal, forthcoming.