Monetary Reference Points of Managers – Empirical Evidence of Status Quo Preferences and Social Comparisons. (6th November 2015)

• Record Type: Journal Article
• Authors: Grund, Christian; Martin, Johannes
• Is Part Of: Scottish journal of political economy. Volume 64:Number 1(2017)
• Page Start: 70
• Page End: 87
• Publication Date: 2015-11-06
• Subjects: Great Britain -- Economic conditions -- 1945-1964 -- Periodicals; Great Britain -- Economic conditions -- 1964-1979 -- Periodicals; Great Britain -- Economic conditions -- 1979-1997 -- Periodicals; 330.9411005
• DOI: 10.1111/sjpe.12103
• Languages: English
• ISSNs: 0036-9292

Abstract

Abstract: We explore whether monetary reference points affect managers′ job satisfaction. These reference points include a manager′s own status quo and the incomes of comparable managers within the same firm and also at the market level. Making use of a unique panel data set of managers in the German chemical sector, we find that social comparisons of compensation do affect reported job satisfaction. Both the relative income position within a manager's own firm and a manager's wage rank on the market have positive relations with job satisfaction. There is no evidence of the relevance of status quo considerations once we control for firm‐related pay variables.