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Output‐Based Performance Pay, Performance‐Support Bias, and the Racial Pay Gap within a Large Retail Stock Brokerage
Author(s) -
Madden Janice Fanning,
Vekker Alexander
Publication year - 2017
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/irel.12191
Subject(s) - business , stock (firearms) , measure (data warehouse) , selection bias , retail sales , marketing , inequality , economics , database , mechanical engineering , medicine , mathematical analysis , mathematics , pathology , computer science , engineering
We measure sources of racial inequality in stockbroker pay. Pay differences arise from sales differences. We measure the extent to which sales differences are due to performance‐support bias, whereby African American brokers receive weaker firm supports, or to forces outside the firm, including client access, selection, and consumer discrimination. Data on firm policies are matched to sales results. Data on self‐generation of accounts measure access to wealthy clients. Sales generated from accounts with sales histories show racial differences in sales arising from selection or consumer discrimination.