Pay allocations by hospital administrators: an empirical analysis

This study uses a policy-capturing approach to examine 816 pay-increase decisions made by 17 hospital administrators. Subjects were asked to respond to packages consisting of hypothetical employees who varied in performance levels, specialized skills or expertise, difficulty in replacing, potential turnover, and current salary. Results indicated that all five factors were significant and in the direction expected for most of the raters. None of the hypothesized interaction effects were significant for any of the raters. Results also showed that subjects' explicit rankings of the importance of the factors did not correspond highly with the rankings of their regression weights. The implications of this study for both research and practice are discussed.