Pay dispersion and organizational innovation: The mediation effects of employee participation and voluntary turnover
Taiyuan Wang, Bin Zhao, Stewart Thornhill
Human Relations · 2015 · Volume 68 · Issue 7
Abstract
Building on social comparison theory, we posit that a firm’s pay dispersion affects its innovation through employee participation and voluntary turnover. By analyzing data collected at both employee and organizational levels from 1419 firms, we found that pay dispersion had an inverted U-shaped effect on employee participation, which in turn enhanced innovation. Pay dispersion had a positive effect on voluntary turnover, which in turn impaired innovation. These findings contribute to research on economic inequity by revealing the mediation mechanisms of employee participation and voluntary turnover in the relationship between pay dispersion and organizational innovation.
Keywords
employee participation, organizational innovation, pay dispersion, voluntary turnover
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