Personnel Economics in Sports
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Personnel Economics in Sports

Edited by Neil Longley

Sport is an effective industry in which to empirically test theories of personnel economics, primarily because the employer-employee relationship in sport is much more visible and transparent than in almost any other industry. This book examines personnel economics within the context of the professional sport industry. The chapters are organized around the core functional areas of personnel economics and cover all aspects of the employment relationship in sport – from recruiting and selection, to pay and performance, to work team design.
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Chapter 7: Pay dispersion and productivity in sports

Leo Kahane

Abstract

Two competing theories related to pay dispersion – the tournament model versus the fairness model – are contrasted. The empirical work examines pay dispersion in the National Hockey League in the three seasons just prior to, and the three seasons just after, the 2004–2005 season-long work stoppage which ultimately resulted in a collective bargaining agreement that drastically compressed salaries in the league. The results lend strong support for the fairness model, meaning that lower within-team pay disparities results in, all else equal, higher team performance

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