Does Higher Involvement Lead to Higher Pay?

| Publication date: 25 Nov 2010 | Theme: Employment & Social policy | NIESR Author(s): Bryson, A | External Author(s): Bockerman, P. and Ilmakunnas, P. | JEL Classification: J24; J31; J33; M12; M50; M52; M53; M54

Seminar at University of St Gallen, Switzerland: Using nationally representative survey data for Finnish employees linked to register data on their wages and work histories we find wage effects of high involvement management (HIM) practices are generally positive and significant. However, employees with better wage and work histories are more likely to enter HIM jobs. The wage premium falls substantially having accounted for employees' work histories suggesting that existing studies' estimates are upwardly biased due to positive selection into HIM. Results do not differ significantly when using propensity score matching as opposed to standard regression techniques. The premium differs markedly across different types of HIM practice and there are heterogeneous returns to HIM across types of employee.

Keyword tags: 
wages, high involvement management, high performance work system, performance-related pay, training

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