HBR on Paying People More
Since 1980, though, overall pay and productivity trends have sharply diverged in the U.S.. And since the 1990s, research on the impact of minimum wage laws has demonstrated that there clearly is some distance between the textbook versions of how wages are set and how it happens in reality. It’s not that minimum wage laws work miracles, but they also don’t have nearly the downward effect on employment levels that a pure supply-demand model would predict. Not to mention that decades of research at the organizational and individual level have shown the link between pay and on-the-job performance to be extremely tenuous.
Over at the Harvard Business Review Justin Fox writes about the case for paying people more, which is worth a look.
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