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Abstract
We use fine-grained federal personnel data to examine how work group diversity is related to the distribution of monetary rewards among employees who are working collectively on a team project. We focus on two types of diversity—demographic and functional—and hypothesize that the former will be positively associated with egalitarianism in reward distributions while the latter will be negatively associated with egalitarianism. Our theory is that managers’ distributional decisions will account for the likelihood of meeting with disagreement, and that this likelihood covaries in different ways with demographic and functional diversity. We argue that managers of demographically heterogeneous groups will deploy egalitarian rewards to avoid exacerbating intra-group conflict along demographic fault-lines. By contrast, managers of functionally heterogeneous groups will be able to justify non-egalitarian rewards because group members accept that functional heterogeneity is associated with intra-group status differences. Additionally, we argue that functional heterogeneity can, by legitimizing intra-group status differences that are correlated with race and gender, activate the negative potential for demographic diversity to be a driver of inequality. Our results suggest that functional heterogeneity and demographic heterogeneity are negatively associated with egalitarianism in group rewards, and that functional heterogeneity interacts with demographic heterogeneity to further reduce egalitarianism.
Notes
3 It is important to note that race and gender can be relevant to employee performance. For instance, evidence suggests that black [female] elementary school students assigned to black [female] teachers do better on standardized tests than black students assigned to white teachers (Dee Citation2004, Citation2007). More generally, the large empirical literature on representative bureaucracy suggests that street-level bureaucrats’ race and gender affect the quality of their interactions with the citizens they serve (see, e.g., Hong Citation2016). The federal agency employees we study herein are not street-level bureaucrats, and so we do not expect race and gender to be directly relevant to the quality of their work.
4 We do not mean to suggest that egalitarianism eliminates perceived unfairness—indeed, equality can itself be viewed as unfair if certain group members contribute more than others to the realization of a group goal. Rather, our point is that for managers hoping to strengthen and maintain the bonds among group members, egalitarianism is a safer bet than equity (i.e., differentiation). As Cropanzano, Bowen, and Gilliland (Citation2007) suggest, “If one desires to stimulate individual motivation, err toward equity. If one desires to build group cohesion, err toward equality” (37-38).
5 Exceptions include employees of the U.S. Postal Service and employees of agencies whose work is clandestine in nature or is subject to security concerns, such as the Central Intelligence Agency, the Defense Intelligence Agency, and the National Security Agency. For a full list of excepted agencies, see https://www.fedscope.opm.gov/datadefn/aehri_sdm.asp.
7 See https://www.opm.gov/policy-data-oversight/performance-management/measuring/employee_performance_handbook.pdf, p. 28.
8 The 158,883 allocation-instances in our data involve 1,201,416 individual employees. The mean award size received by an individual employee was $570, with a standard deviation of $582.
9 The data we have on federal employees’ race is limited to a binary indicator of minority status (i.e., white vs. nonwhite). While we would prefer a more fine-grained measure of race—one that, for instance, distinguished blacks from Hispanics—our binary indicator does capture an employee’s majority/minority group membership along the dimension of race. And it is the differential status accorded to majority and minority individuals that is thought to underlie race-based intra-group conflict (Kanter Citation1977).
10 The central personnel data file classifies employees into one of 22 education levels: (1) no formal education or some elementary school; (2) elementary school completed, no high school; (3) some high school, did not complete; (4) high school graduate or certificate of equivalency; (5) terminal occupation program, did not complete; (6) terminal occupation program, certificate; (7) some college, less than one year; (8) one year college; (9) two years college; (10) associate’s degree; (11) three years college; (12) four years college; (13) bachelor’s degree; (14) post-bachelor’s; (15) first professional; (16) post-first professional; (17) master’s degree; (18) post-master’s; (19) sixth-year degree; (20) post-sixth year; (21) doctorate degree; (22) post-doctorate. For context, the top three education levels attained by federal employees as of September 2013 were high school graduate or certificate of equivalency (26.1%), bachelor’s degree (25.8%), and master’s degree (13.5%). A large drop-off occurs thereafter, with associate’s degree (6.1%), some college, less than one year (4.9%), and first professional (3.5%) registering as the fourth through sixth most commonly attained education levels.
11 Specifically, we control for the total number of monetary and non-monetary performance bonuses that an individual has received during the course of his or her career in the federal government. In addition, the particular type of group reward that is the focus of our analysis, federal agencies hand out numerous other types of individual and group rewards to employees with the aim of encouraging and rewarding good performance. These include, for instance, time-off awards and awards for saving agencies money by finding a more efficient way to achieve agency objectives. Notwithstanding popular perceptions that federal agencies do a poor job of recognizing and rewarding good performance, huge amounts of performance pay money circulate throughout the federal government every year. Between the years 2007 and 2013, for instance, the federal government distributed close to 2.4 million spot bonuses to its employees. These bonuses, whose purpose is to reward individual employees for instances of good performance occurring outside of agencies’ regular evaluation cycles, averaged $818 over this time period and summed to a total of just over $1.9 billion. There is considerable between-employee variation in award frequency in our data, suggesting that the front-line federal supervisors who distribute these rewards do in fact make efforts to identify and reward high-quality employee performance.
12 In the federal civil service, salary growth is regularized, though not completely so. Under 5 U.S. Code §4703, the Office of Personnel Management is, in cooperation with other federal agencies, allowed to conduct demonstration projects—including demonstration projects involving employee compensation. Moreover, various other statutes aimed at modifying approaches to employee compensation and performance management have, over the years, injected a certain amount of non-regularity into particular agencies’ personnel systems (see, e.g., Riccucci and Thompson Citation2008). Consequently, there is considerable between-employee variation in salary growth in our data.
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John D. Marvel
John D. Marvel is an associate professor in the Schar School of Policy and Government at George Mason University and a former Fellow at the federal government’s Office of Evaluation Sciences. His research focuses on public management, work motivation, and the public opinion of government performance.