Knowledge that Transforms

Abstract Research on family firms' employment practices remains equivocal with findings from studies framed on the basis of stewardship and socioemotional wealth (SEW) preservation perspectives suggesting that family firms are better employers than nonfamily peers, and findings from studies grounded on agency theory suggesting the opposite. Arguing that these two perspectives are not mutually exclusive, we theorize that, consistent with notions of compensating differentials, pay practices in family firms offer a compensatory balancing of lower base pay with pay forms and benefits signaling the kind of caring, support and long‐term commitment typical of such firms. Accordingly, while, consistent with an agentic perspective, pay rates in nonfamily firms may be higher than in family firms, consistent with the stewardship/SEW perspective, we argue that pay and benefits may be structured to offer greater long‐term reward security in family firms. Focusing on reward practices among employees in a single job in a single industry (i.e., truck drivers), we find that where there are differences, they generally favor family firms, with a significantly higher proportion of family firms paying on the basis of fixed salary (as opposed to more variable hourly/mile‐based rates), and with those firms paying hourly offering typical and “floor” rates higher than those offered by nonfamily firms. Implications for theory and practice are discussed.

Abstract High rates of turnover among racial minority employees have largely been explained by the adage that dissimilarity breeds discontent. An unexplored, but potentially powerful driver of turnover, may emerge as a result of supervisors' and employees' own beliefs about minority employees' abilities. We rely on predictions from research on Pygmalion effects to examine how external, leader biases can elicit subsequent differences in employees' internal cognitions, which then impact turnover decisions. Utilizing a survey study of 228 employers and employees across four time points, we found support for the notion that leaders view racial minority new hires as having less efficacy than their White counterparts, and that these biases, when combined with less satisfactory supervision, lead minorities to have decreased self‐efficacy, subsequently causing them to perceive a less viable future in that company and voluntarily turn over.

Abstract Although research indicates that affect is related to job search self‐regulation, evidence is mixed. Such mixed results may be because most prior studies examined either the information—pleasantness—function of affect, or the motivation—activation—function of affect, although affect is theorized to serve both functions. Based on the circumplex model of affect, we examine four types of affect based on pleasantness and activation, namely activated and deactivated positive and negative affect. We propose that these four types of affect have different effects on job search processes—effort—and in turn outcomes—number of interviews and job offers. Furthermore, we draw on Hoyle's conditional influence approach (2006, 2010) to propose that how job seekers react to affect depends on individual differences in self‐regulation abilities as indicated by core self‐evaluations (CSEs). In an 8‐week repeated‐measure study, we found that both activated positive and activated negative affect related positively to job search processes and outcomes. These relationships were negative for deactivated positive affect, and nonsignificant for deactivated negative affect. CSE moderated the positive relationships of activated positive and activated negative affect with job search processes and outcomes, such that these relationships were positive only for job seekers high in CSE.

Abstract Mentorship quality is an important aspect of mentorship effectiveness, yet we know little about its predictors. Using social identity theory, we examined the relationship between mentor alcohol use norms and mentorship quality as perceived by protégés. Our study also considered the mediating role of protégé identification with the mentor and the moderating role of protégé traditionality. The findings, based on mentor‐protégé dyadic data collected through a three‐wave survey in China, indicate that mentor alcohol use norms are negatively related to mentorship quality, and that this relationship is mediated by protégé identification with the mentor. Furthermore, the traditionality of protégés alleviates not only the negative relationship between mentor alcohol use norms and protégé identification with the mentor, but also the indirect relationship between mentor alcohol use norms and mentorship quality via protégé identification with the mentor. The results underscore the value of focusing on mentor behavioral norms that are not directed toward the protégé. We conclude with a discussion of the theoretical and practical implications for mentoring research.

Abstract This study investigates how firm structure, chief executive officer (CEO) power, and federal legislation influence hiring of corporate directors from a diverse background. Combining the value‐in‐diversity hypothesis and the similarity‐attraction paradigm, we examine the impact of economically rational (i.e., business need) and social preference (i.e., similar‐to‐me bias) drivers of board diversity post‐the Sarbanes‐Oxley Act of 2002 (SOX). Using a sample of S&P 1500 firms from an eight‐year period spanning SOX, we find that SOX is positively correlated with board diversity. Although SOX was not intended to increase board diversity, the changes it put in place have subsequently facilitated more board diversity. Results show that the economically rational predictor (firm operational complexity) had a positive and statistically significant effect on board diversity pre‐SOX but that effect disappeared post‐SOX. Meanwhile, CEO power, a social preference inhibitor of board diversity, had a negative and statistically significant relationship with board diversity pre‐SOX which also disappeared post‐SOX. It appears that SOX has mitigated both economically rational drivers to want more diversity as well as social preference drivers to want less diversity. Implications of these findings for research and practice are discussed.

Abstract The purpose of this study is to shed light on the effects of the CEO pay ratio and say‐on‐pay votes on directors' concerns about CEO pay equity. Investigation of the pay ratio disclosure rule offers opportunities to gain insights into whether equity perceptions associated with mandated pay ratio disclosure have significant effects on remuneration decisions in organizations. We conduct an online experiment with practicing corporate directors to examine the effects of CEO pay ratio disclosures and say‐on‐pay (SOP) votes on director decisions. Results indicate that CEO pay ratio disclosures significantly influence directors' decisions regarding executive compensation, leading directors to be less willing to increase CEO pay when the pay ratio is above the industry average pay ratio. Results also demonstrate that say‐on‐pay votes only influence directors' compensation decisions when the CEO pay ratio is above the industry average. Directors in firms with pay ratios that are above the industry average are less willing to increase CEO pay when they anticipate shareholder votes against a CEO pay increase than when they anticipate positive SOP voting outcomes. Directors in firms with CEO pay ratios that are below the industry average, however, are willing to increase CEO pay regardless of SOP voting outcomes.

Abstract Actions such as work restructuring and wage and employment freezes taken by organizations in response to recessions are widely assumed to decrease employees' job security and detrimentally affect perceptions of management's trustworthiness. We assess whether these effects occur and if, in turn, they affect workplace absenteeism. Using data from Britain's Workplace Employee Relations Survey 2011, we show that the effects on stress‐based absence are limited and not as predicted, but the effects on withdrawal‐based absence are strong and as predicted. Reductions in well‐being or job security's effect on well‐being did not affect absence, and while the reduction of trust perceptions' effect was to increase anxiety, anxiety did not increase but reduced absenteeism. The effects on withdrawal absence differ: those of recessionary action through job security reduce absenteeism, while those through trust perceptions increase it, both as predicted. The two effects involving trust perceptions are less pronounced when recessionary actions are accompanied by voluntary layoffs, but not by compulsory layoffs. The implications for management are that they should be more conscious of the effects on absence when planning recessionary actions, and more generally their effects on presenteeism.

Abstract CEO incentives have been the subject of great interest for human resource scholars. We explore the institutional context within which the CEO makes sense of their incentives. Our theory suggests that CEO equity incentives interact with institutional norms to influence foreign market entry choices. Specifically, we argue that CEOs will weigh the risk bearing created by equity incentives, along with the consequences of legitimacy loss, when deciding whether to deviate from institutional norms when internationalizing. In doing so, we advance human resource literature by demonstrating that CEO responses to incentives are influenced by institutional norms and that CEOs' decisions to deviate from institutional norms are shaped by their incentives. We find support for our framework in the analysis of the stake taken by acquirers in 4,184 cross‐border acquisitions.