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Finn Christensen, James Manley and Louise Laurence
''The Allocation of Merit Pay in Academia: A Case Study''
( 2011, Vol. 31 No.2 )
This paper investigates whether the widespread awarding of faculty merit pay at a large public university accurately reflects productivity. We show that pairwise voting on a quality standard by a committee can in theory be consistent with observed allocation patterns. However, the data indicate only nominal adherence to a quality standard. Departments with more severe compression issues are more likely to award merit pay as a countermeasure and some departments appear to be motivated by nonpecuniary incentives. Much of the variance in merit pay allocation remains unexplained. These results suggest reform is needed to improve transparency in the merit system.
Keywords: merit, faculty compensation
JEL: I2 - Education: General
J3 - Wages, Compensation, and Labor Costs: General
Manuscript Received : Jan 13 2011 Manuscript Accepted : Jun 05 2011

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