The legitimacy of pay and performance comparisons: an analysis of UK University Vice Chancellors pay awards

Heather Tarbert, Kaihong Tee, Robert Watson

Research output: Contribution to journalArticle

  • 4 Citations

Abstract

This article examines UK University Vice Chancellors (VC) pay awards. The empirical analysis, covering the period 1997–2002, evaluates the impact upon VC pay awards of university performance measures, internal pay comparisons and two external pay comparisons, that is, the pay of other VCs and the pay of chief executive officers (CEOs) leading comparable-sized UK firms. For the total sample, we find no evidence that VC pay awards are related to any of the performance measures, although for the pre- and post-1992 subsamples there is some evidence that pay awards are related to some ‘mission-relevant’ performance measures. All the analyses show a positive relationship between changes in the proportion of other highly paid employees and VC pay awards, which suggests that internal pay comparisons play an important role in remuneration committee decision making. As anticipated, the two external pay benchmarks have very different effects upon VC pay awards; the pay received by other VCs produces a marked ‘mean reversion’ in pay levels while the pay of CEOs running comparable-sized UK firms had a highly significant positive impact upon VC pay awards. Following the insights of institutional theory, we interpret this conservatism by university remuneration committees as stemming primarily from legitimation concerns rather than financial constraints.
Original languageEnglish
Pages (from-to)771-805
Number of pages35
JournalBritish Journal of Industrial Relations
Volume46
Issue number4
DOIs
StatePublished - 4 Dec 2008
Externally publishedYes

Fingerprint

Performance measures
Remuneration
Proportion
Benchmark
Legitimacy
Institutional theory
Legitimation
Employees
Conservatism

Cite this

Tarbert, Heather; Tee, Kaihong; Watson, Robert / The legitimacy of pay and performance comparisons : an analysis of UK University Vice Chancellors pay awards.

In: British Journal of Industrial Relations, Vol. 46, No. 4, 04.12.2008, p. 771-805.

Research output: Contribution to journalArticle

@article{ad48a01f00034e33bebc8a8cad8c7b0e,
title = "The legitimacy of pay and performance comparisons: an analysis of UK University Vice Chancellors pay awards",
abstract = "This article examines UK University Vice Chancellors (VC) pay awards. The empirical analysis, covering the period 1997–2002, evaluates the impact upon VC pay awards of university performance measures, internal pay comparisons and two external pay comparisons, that is, the pay of other VCs and the pay of chief executive officers (CEOs) leading comparable-sized UK firms. For the total sample, we find no evidence that VC pay awards are related to any of the performance measures, although for the pre- and post-1992 subsamples there is some evidence that pay awards are related to some ‘mission-relevant’ performance measures. All the analyses show a positive relationship between changes in the proportion of other highly paid employees and VC pay awards, which suggests that internal pay comparisons play an important role in remuneration committee decision making. As anticipated, the two external pay benchmarks have very different effects upon VC pay awards; the pay received by other VCs produces a marked ‘mean reversion’ in pay levels while the pay of CEOs running comparable-sized UK firms had a highly significant positive impact upon VC pay awards. Following the insights of institutional theory, we interpret this conservatism by university remuneration committees as stemming primarily from legitimation concerns rather than financial constraints.",
author = "Heather Tarbert and Kaihong Tee and Robert Watson",
year = "2008",
month = "12",
doi = "10.1111/j.1467-8543.2008.00689.x",
volume = "46",
pages = "771--805",
journal = "British Journal of Industrial Relations",
number = "4",

}

The legitimacy of pay and performance comparisons : an analysis of UK University Vice Chancellors pay awards. / Tarbert, Heather; Tee, Kaihong; Watson, Robert.

In: British Journal of Industrial Relations, Vol. 46, No. 4, 04.12.2008, p. 771-805.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The legitimacy of pay and performance comparisons

T2 - British Journal of Industrial Relations

AU - Tarbert,Heather

AU - Tee,Kaihong

AU - Watson,Robert

PY - 2008/12/4

Y1 - 2008/12/4

N2 - This article examines UK University Vice Chancellors (VC) pay awards. The empirical analysis, covering the period 1997–2002, evaluates the impact upon VC pay awards of university performance measures, internal pay comparisons and two external pay comparisons, that is, the pay of other VCs and the pay of chief executive officers (CEOs) leading comparable-sized UK firms. For the total sample, we find no evidence that VC pay awards are related to any of the performance measures, although for the pre- and post-1992 subsamples there is some evidence that pay awards are related to some ‘mission-relevant’ performance measures. All the analyses show a positive relationship between changes in the proportion of other highly paid employees and VC pay awards, which suggests that internal pay comparisons play an important role in remuneration committee decision making. As anticipated, the two external pay benchmarks have very different effects upon VC pay awards; the pay received by other VCs produces a marked ‘mean reversion’ in pay levels while the pay of CEOs running comparable-sized UK firms had a highly significant positive impact upon VC pay awards. Following the insights of institutional theory, we interpret this conservatism by university remuneration committees as stemming primarily from legitimation concerns rather than financial constraints.

AB - This article examines UK University Vice Chancellors (VC) pay awards. The empirical analysis, covering the period 1997–2002, evaluates the impact upon VC pay awards of university performance measures, internal pay comparisons and two external pay comparisons, that is, the pay of other VCs and the pay of chief executive officers (CEOs) leading comparable-sized UK firms. For the total sample, we find no evidence that VC pay awards are related to any of the performance measures, although for the pre- and post-1992 subsamples there is some evidence that pay awards are related to some ‘mission-relevant’ performance measures. All the analyses show a positive relationship between changes in the proportion of other highly paid employees and VC pay awards, which suggests that internal pay comparisons play an important role in remuneration committee decision making. As anticipated, the two external pay benchmarks have very different effects upon VC pay awards; the pay received by other VCs produces a marked ‘mean reversion’ in pay levels while the pay of CEOs running comparable-sized UK firms had a highly significant positive impact upon VC pay awards. Following the insights of institutional theory, we interpret this conservatism by university remuneration committees as stemming primarily from legitimation concerns rather than financial constraints.

U2 - 10.1111/j.1467-8543.2008.00689.x

DO - 10.1111/j.1467-8543.2008.00689.x

M3 - Article

VL - 46

SP - 771

EP - 805

JO - British Journal of Industrial Relations

JF - British Journal of Industrial Relations

IS - 4

ER -