Salary Dispersion, Location in the Salary Distribution, and Turnover among College Administrators

Abstract

This paper examines how the amount of dispersion in an organization's salary distribution and an individual's location in that distribution affect turnover. Using data for the years 1978–79 and 1983–84 on more than 10,000 administrators in 821 U.S. colleges and universities, the authors find that salary dispersion negatively affected the turnover of administrators with relatively high salaries and positively affected the turnover of those with relatively low salaries. The joint effect of salary dispersion and relative salary on turnover was strengthened when salary information was publicly available and when a well-developed external labor market was present.