TY  - JOUR
T1  - Selection benefits of below-market pay in social-mission organizations: effects on individual performance and team cooperation
JF  - The Accounting Review
Y1  - 2020
A1  - Chen,Clara
A1  - Pesch,Heather
A1  - Wang,Laura
KW  - Accounting
AB  - Many organizations whose core purpose is to advance a social mission pay employees below-market wages. We investigate two under-appreciated benefits of below-market pay in these social-mission organizations. In a series of experiments, we predict and find that, holding employees’ outside opportunities constant, those attracted to social-mission organizations that pay below-market wages perform better individually and cooperate more effectively in teams than those attracted to social-mission organizations that pay higher wages. The individual performance effect arises because below-market pay facilitates the selection of value-congruent employees who are naturally inclined to work hard for the organizational mission. The team cooperation effect arises because employees expect team members who have selected a social-mission job that pays below market to be more value-congruent and, therefore, more cooperative than those who have selected a social-mission job that pays higher wages. Collectively, we demonstrate that in social-mission organizations, offering below-market pay can yield selection benefits.
VL  - 95
CP  - 1
U2  - a
U4  - 189097000960
ID  - 189097000960
ER  -