The Role of Celebrity and Status in the Performance–Pay Relationship: Evidence from the ‘Big Five’ European Football Leagues

Antonio  Giangreco; Barbara  Slavich; Alessandro   Piazza; Fabrizio  Castellucci; Cyrus   Mohadjer

doi:10.37725/mgmt.v24i1.4511

Antonio Giangreco IESEG School of Management, Paris and Lille, France; and LEM-CNRS UMR 9221, Lille, France
Barbara Slavich IESEG School of Management, Paris and Lille, France; and LEM-CNRS UMR 9221, Lille, France
Alessandro Piazza Jesse H. Jones School of Business, Rice University, Houston, USA
Fabrizio Castellucci Department of Management and Technology, Bocconi University, Milan, Italy
Cyrus Mohadjer IESEG School of Management, Paris and Lille, France

DOI: https://doi.org/10.37725/mgmt.v24i1.4511

Keywords: Performance, Pay, Status, Celebrity, ‘Big Five’ European football leagues

Abstract

This study explores the reasons behind the existence of frequent mismatches between performance of individuals in organisations and their salary, with a specific focus on contexts where actors or employees are highly visible and representative of organisations. We argue that two intangible assets – celebrity and status – might affect the intensity of the link between individual performance and pay levels. Using a panel data set of professional footballers from the top five European leagues, we find that there is a positive association between players’ performance in one period (season) and their salary in the subsequent season, and that this relationship is negatively moderated by both the players’ celebrity and status. Theoretical contributions and managerial implications are discussed, along with the generalisability of the results to other settings.

Downloads

Download data is not yet available.

Author Biographies

Antonio Giangreco, IESEG School of Management, Paris and Lille, France; and LEM-CNRS UMR 9221, Lille, France

Antonio Giangreco is Professor of HRM & OB and Associate Dean for International Relations at IESEG School of Management (LEM-CNRS UMR 9221), Lille (France). He received his PhD from The London School of Economics and Political Science (LSE). His main research interests are in the area of compensation schemes, performance assessment, employee wellbeing and IT driven change.

Barbara Slavich, IESEG School of Management, Paris and Lille, France; and LEM-CNRS UMR 9221, Lille, France

Barbara Slavich is Professor of Organization at IESEG School of Management (LEM-CNRS UMR 9221), Paris (France). She holds a double PhD degree in Management from ESADE Business School (Barcelona, Spain) and Università Ca’ Foscari (Venice, Italy). She was visiting scholar at Columbia University (New York) and at Duke University (North Carolina). Her research focuses on organizing and leading for creativity and innovation, with emphasis on creative industries, as well as on the emergence and dynamics of new categories and styles.

Alessandro Piazza, Jesse H. Jones School of Business, Rice University, Houston, USA

Alessandro Piazza is an Assistant Professor of Strategic Management at the Jesse H. Jones School of Business, Rice University. He received his PhD from the Graduate School of Business at Columbia University, and he also holds a doctorate in business administration and management from Bocconi University. His research interests include social evaluations of organizations, activism and contention, as well as social structural approaches to entrepreneurship.

Fabrizio Castellucci, Department of Management and Technology, Bocconi University, Milan, Italy

Fabrizio Castellucci is Associate Professor of Organization Theory at the Department of Management and Technology at Bocconi University, Professor of Leadership at SDA Bocconi School of Management, and a Fellow of the Invernizzi Center for Research in Innovation, Organization, and Strategy (ICRIOS) at Bocconi University. He received his PhD from the Graduate School of Business at Stanford University. His research focuses on status, reputation, social networks and organizational learning.

Cyrus Mohadjer, IESEG School of Management, Paris and Lille, France

Cyrus Mohadjer has recently received a Master of Science in Management from IESEG School of Management (Lille). He currently works in the financial sector.

References

Adams, J. S. (1963). Toward an understanding of inequity. Journal of Abnormal Psychology, 67, 422–436. doi: 10.1037/h0040968

Baccarella, C. V., Wagner, T. F., Kietzmann, J. H. & McCarthy, I. P. (2018). Social media? It’s serious! Understanding the dark side of social media. European Management Journal, 36(4), 431–438. doi: 10.1016/j.emj.2018.07.002

Benjamin, B. A. & Podolny, J. M. (1999). Status, quality, and social order in the California wine industry. Administrative Science Quarterly, 44(3), 563–589. doi: 10.2307/2666962

Brown, M. P., Sturman, M. C. & Simmering, M. J. (2003). Compensation policy and organizational performance: The efficiency, operational, and financial implications of pay levels and pay structure. Academy of Management Journal, 46, 752–762. doi: 10.5465/30040666

Bucciol, A., Foss, N. J. & Piovesan, M. (2014). Pay dispersion and performance in teams. PLoS One, 9(11), e112631. doi: 10.1371/journal.pone.0112631

Carlsson-Wall, M., Kraus, K. & Messner, M. (2016). Performance measurement systems and the enactment of different institutional logics: Insights from a football organization. Management Accounting Research, 32, 45–61. doi: 10.1016/j.mar.2016.01.006

Carmichael, F., McHale, I. & Thomas, D. (2011). Maintaining market position: team performance, revenue and wage expenditure in the english premier league. Bulletin of Economic Research, 63(4), 464–497. doi: 10.1111/j.1467-8586.2009.00340.x

Castellucci, F. & G. Ertug, G. (2010). What’s in it for them? Advantages of higher-status partners in exchange relationships. Academy of Management Journal, 53(1), 149–166. doi: 10.5465/amj.2010.48037314

Chiang, F. F. T. & Birtch, T. A. (2010). Appraising performance across borders: An empirical examination of the purposes and practices of performance appraisal in a multi-country context. Journal of Management Studies, 47, 1365–1393. doi: 10.1111/j.1467-6486.2010.00937.x

Chen, G., Hambrick, D. C. & Pollock, T. G. (2008). Puttin’on the Ritz: Pre-IPO enlistment of prestigious affiliates as deadline-induced remediation. Academy of Management Journal, 51(5), 954–975. doi: 10.5465/amj.2008.34789666

Choi, C. J. & Berger, B. (2009). Ethics of global Internet, community and fame addiction. Journal of Business Ethics, 85(2), 193–200. doi: 10.1007/s10551-008-9764-6

Coleman, J. S. (1990). Foundations of social theory. Harvard University Press.

Conlon, E. J. & Parks, J. M. (1990). Effects of monitoring and tradition on compensation arrangements: An experiment with principal-agent dyads. Academy of Management Journal, 33(3), 603–622. doi: 10.5465/256583

Della Torre, E., Giangreco, A. & Maes, J. (2014). Show me the money! Pay structure and individual performance in golden teams. European Management Review, 11(1), 85–100. doi: 10.1111/emre.12025

Della Torre, E., Giangreco, A., Legeais, W. & Vakkayil, J. (2018). Do Italians really do it better? Evidence of migrant pay disparities in the top Italian Football league. European Management Review, 15, 121–136. doi: 10.1111/emre.12136

Dobson, S. & Goddard, J. (2011). The economics of football (2nd edn.). Cambridge University Press.

Eisenhardt, K. (1988) Agency and institutional explanations of compensation in retail sales. Academy of Management Journal, 31, 488–511. doi: 10.5465/256457

Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14, 57–74. doi: 10.5465/256457

Ertug, G. & Castellucci, F. (2013). Getting what you need: How reputation and status affect team performance, hiring, and salaries in the NBA. Academy of Management Journal, 56(2), 407–431. doi: 10.5465/amj.2010.1084

Franck, E. & Nüesch, S. (2008). Mechanisms of superstar formation in German soccer: Empirical evidence. European Sport Management Quarterly, 8(2), 145–164. doi: 10.1080/16184740802024450

Garcia-del-Barrio, P. & Pujol, F. (2007). Hidden monopsony rents in winner-take-all markets – Sport and economic contribution of Spanish soccer players. Managerial and Decision Economics, 28(1), 57–70. doi: 10.1002/mde.1313

Gerhart, B., Rynes, S. L. & Fulmer, I. S. (2009). Pay and performance: Individuals, groups, and executives. Academy of Management Annals, 3(1), 251–315. doi: 10.1080/19416520903047269

Gerhart, B. & Fang, M. (2014). Pay for (individual) performance: Issues, claims, evidence and the role of sorting effects. Human Resource Management Review, 24(1), 41–52. doi: 10.1016/j.hrmr.2013.08.010

Gerhart, B. & Milkovich, G. T. (1990). Organizational differences in managerial compensation and financial performance. Academy of Management Journal, 33(4), 663–691. doi: 10.5465/256286

Gerhards, J. & Mutz, M. (2016). Who wins the championship? Market value and team composition as predictors of success in the top European Football Leagues. European Societies, 19(3), 1–20. doi: 10.1080/14616696.2016.1268704

Graffin, S. D., Bundy, J., Porac, J. F., Wade, J. B. & Quinn, D. P. (2013). Falls from grace and the hazards of high status: The 2009 British MP expense scandal and its impact on parliamentary elites. Administrative Science Quarterly, 58(3), 313–345. doi: 10.1177/0001839213497011

Green, C., Lozano, F. & Simmons, R. (2015). Rank-order tournaments, probability of winning and investing in talent: Evidence from champions’ league qualifying rules. National Institute Economic Review, 232(1), 30–40. doi: 10.1177/002795011523200104

Hayward, M. L., Rindova, V. P. & Pollock, T. G. (2004). Believing one’s own press: The causes and consequences of CEO celebrity. Strategic Management Journal, 25(7), 637–653. doi: 10.1002/smj.405

Hiatt, S. R., Sine, W. D. & Tolbert, P. S. (2009). From Pabst to Pepsi: The deinstitutionalization of social practices and the creation of entrepreneurial opportunities. Administrative Science Quarterly, 54, 635. doi: 10.2189/asqu.2009.54.4.635

Hubbard, T. D., Pollock, T. G., Pfarrer, M. D. & Rindova, V. P. (2018). Safe bets or hot hands? How status and celebrity influence strategic alliance formations by newly public firms. Academy of Management Journal, 61(5), 1976–1999. doi: 10.5465/amj.2016.0438

Kakkar, H., Sivanathan, N. & Gobel, M. (2019). Fall from grace: The role of dominance and prestige in the punishment of high-status actors. Academy of Management Journal, 63(2), 530–553. doi: 10.5465/amj.2017.0729

Kim, J. W. & King, B. G. (2014). Seeing stars: Matthew effects and status bias in major league baseball umpiring. Management Science, 60(11), 2619–2644. doi: 10.1287/mnsc.2014.1967

Kiefer, S. (2014). The impact of the Euro 2012 on popularity and market value of football players. International Journal of Sport Finance, 9(2), 95. http://hdl.handle.net/10419/67719

Kotler, P., Rein, I. J. & Stoller, M. R. (1987). High visibility. Dodd, Mead & Company.

Lakshman, C., Vo, L. C., Ladha, R. S. & Gok, K. (2019). Consequences of paying CEOs for downsizing: A four-country study of the impacts on survivors vs. victims. M@n@gement, 22(2), 250–272. doi: 10.3917/mana.222.0250

Lazer, D. & Radford, J. (2017). Data ex-machina: Introduction to big data. Annual Review of Sociology, 43, 19–39. doi: 10.1146/annurev-soc-060116-053457

Lechner, C. & Gudmundsson, S. V. (2012). Superior value creation in sports teams: Resources and managerial experience. M@n@gement, 15(3), 284–312. doi: 10.3917/mana.153.0284

Lehmann, E. E. & Schulze, G. G. (2008). What does it take to be a star? – The role of performance and the media for German soccer players. Applied Economics Quarterly, 54(1), 59–70. doi: 10.3790/aeq.54.1.59

Lewis, K., Gray, K. & Meierhenrich, J. (2014). The structure of online activism. Sociological Science, 1, 1–9. doi: 10.15195/v1.a1

Liu, H., Yi, Q., Giménez, J. V., Gómez, M. A. et al. (2015). Performance profiles of football teams in the UEFA champions league considering situational efficiency. International Journal of Performance Analysis in Sport, 15(1), 371–390. doi: 10.1080/24748668.2015.11868799

Lounsbury, M. & Glynn, M. A. (2001). Cultural entrepreneurship: Stories, legitimacy, and the acquisition of resources. Strategic Management Journal, 22(6–7), 545–564. doi: 10.1002/smj.188

Lucifora, C. & Simmons, R. (2003). Superstar effects in sport: Evidence from Italian soccer. Journal of Sports Economics, 4(1), 35–55. doi: 10.1177/1527002502239657

Majewski, S. (2016). Identification of factors determining market value of the most valuable football players. Journal of Management and Business Administration, 24(3), 91–104. doi: 10.7206/jmba.ce.2450-7814.177

Marwick, A. & Boyd, D. (2011). To see and be seen: Celebrity practice on Twitter. Convergence, 17(2), 139–158. doi: 10.1177/1354856510394539

Mathys, J., Burmester, A. B. & Clement, M. (2016). What drives the market popularity of celebrities? A longitudinal analysis of consumer interest in film stars. International Journal of Research in Marketing, 33(2), 428–448. doi: 10.1016/j.ijresmar.2015.09.003

McCracken, G. (1989). Who is the celebrity endorser? Cultural foundations of the endorsement process. Journal of Consumer Research, 16(3), 310–321. doi: 10.1086/209217

Merton, R. K. (1968). The Matthew Effect in science. Science, 159(3810), 56–63. doi: 10.1126/science.159.3810.56

Merton, R. K. (1995). The Thomas theorem and the Matthew Effect. Social Forces, 74, 379–422.

Milkovich, G. T., Newman, J. M. & Gerhart, B. (2011). Compensation (10th edn.). McGraw-Hill.

Mohammadi, S., Farahbakhsh, R. & Crespi, N. (2017). Popularity evolution of professional users on Facebook. In Communications (ICC) 2017 IEEE International Conference on (pp. 1–6). 21–25 May. doi: 10.1109/ICC.2017.7997220

Montanari, F., Silvestri, G. & Bof, F. (2008). Performance and individual characteristics as predictors of pay levels: The case of the Italian ‘Serie A’. European Sport Management Quarterly, 8, 27–44. doi: 10.1080/16184740701814381

Nelson-Field, K., Riebe, E. & Sharp, B. (2012). What’s not to ‘like?’ Journal of Advertising Research, 52(2), 262–269. doi: 10.2501/JAR-52-2-262-269

Nyberg, A. J., Pieper, J. R. & Trevor, C. O. (2016). Pay-for-performance’s effect on future employee performance: Integrating psychological and economic principles toward a contingency perspective. Journal of Management, 42(7), 1753–1783. doi: 10.1177/0149206313515520

Pepper, A. & Gore, J. (2015). Behavioral agency theory: New foundations for theorizing about executive compensation. Journal of Management, 41(4), 1045–1068. doi: 10.1177/0149206312461054

Pfarrer, M. D., Pollock, T. G. & Rindova, V. P. (2010). A tale of two assets: The effects of firm reputation and celebrity on earnings surprises and investors’ reactions. Academy of Management Journal, 53(5), 1131–1152. doi: 10.1177/0149206312461054

Phillips, D. J. & Zuckerman, E. W. (2001). Middle-status conformity: Theoretical restatement and empirical demonstration in two markets. American Journal of Sociology, 107(2), 379–429. doi: 10.1086/324072

Piazza, A. & Castellucci, F. (2014). Status in organization and management theory. Journal of Management, 40(1), 287–315. doi: 10.1177/0149206313498904

Podolny, J. M. (1993). A status-based model of market competition. American Journal of Sociology, 98(4), 829–872. doi: 10.1086/230091

Podolny, J. M. (2010). Status signals: A sociological study of market competition. Princeton University Press.

Podolny, J. M. & Phillips, D. J. (1996). The dynamics of organizational status. Industrial and Corporate Change, 5(2), 453–471. doi: 10.1093/icc/5.2.453

Podolny, J. M. & Stuart, T. E. (1995). A role-based ecology of technological change. American Journal of Sociology, 100(5), 1224–1260. doi: 10.1086/230637

Podolny, J. M., Stuart, T. E. & Hannan, M. T. (1996). Networks, knowledge, and niches: Competition in the worldwide semiconductor industry, 1984–1991. American Journal of Sociology, 659–689. doi: 10.1086/230994

Pollock, T. G., Lashley, K., Rindova, V. P. & Han, J. H. (2019). Which of these things are not like the others? Comparing the rational, emotional and moral aspects of reputation, status, celebrity and stigma. Academy of Management Annals, 13(2): 444–478. doi: 10.5465/annals.2017.0086

Pollock, T. G. & Rindova, V. P. (2003). Media legitimation effects in the market for initial public offerings. Academy of Management Journal, 46(5), 631–642. doi: 10.5465/30040654

Rao, H., Greve, H. R. & Davis, G. F. (2001). Fool’s gold: Social proof in the initiation and abandonment of coverage by Wall Street analysts. Administrative Science Quarterly, 46(3), 502–526. doi: 10.2307/3094873

Rindova, V. P., Pollock, T. G. & Hayward, M. L. (2006). Celebrity firms: The social construction of market popularity. Academy of Management Review, 31(1), 50–71. doi: 10.5465/amr.2006.19379624

Rindova, V. P. & Fombrun, C. J. (1999). Constructing competitive advantage: The role of firm–constituent interactions. Strategic Management Journal, 20(8), 691–710. doi: 10.1002/(SICI)1097-0266(199908)20:8<691::AID-SMJ48>3.0.CO;2-1

Risaliti, G. & Verona, R. (2012). Players’ registration rights in the financial statements of the leading Italian clubs: A survey of Inter, Juventus, Lazio, Milan and Roma. Accounting, Auditing & Accountability Journal, 26(1), 16–47. doi: 10.1108/09513571311285603

Salancik, G. R. & Pfeffer, J. (1978). A social information processing approach to job attitudes and task design. Administrative Science Quarterly, 23(2), 224–253. doi: 10.2307/2392563

Scoppa, V. (2015). Fatigue and team performance in soccer: Evidence from the FIFA World Cup and the UEFA European championship. Journal of Sports Economics, 16(5), 482–507. doi: 10.1177/1527002513502794

Sgro, F. & Lipoma, M. (2016). Technical performance profiles in the European Football Championship. Journal of Physical Education and Sport, 16(4), 1304. doi: 10.7752/jpes.2016.04207

Shin, T. & You, J. (2017). Pay for talk: How the use of shareholder-value language affects CEO compensation. Journal of Management Studies, 54, 88–117. doi: 10.1111/joms.12218

Skinner, B. F. (1953). Science and human behavior. MacMillan.

Sorenson, O. (2014). Status and reputation: Synonyms or separate concepts? Strategic Organization, 12(1), 62–69.

Thrane, C. (2019). Performance and actual pay in Norwegian soccer. Journal of Sports Economics, 20(8), 1051–1065 doi: 10.1177/1527002519851146

Tiedemann, T., Francksen, T. & Latacz-Lohmann, U. (2011). Assessing the performance of German Bundesliga football players: A non-parametric metafrontier approach. Central European Journal of Operations Research, 19(4), 571–587. doi: 10.1007/s10100-010-0146-7

Torgler, B. & Schmidt, S. L. (2007). What shapes player performance in soccer? Empirical findings from a panel analysis. Applied Economics, 39(18), 2355–2369. doi: 10.1080/00036840600660739

Vroom, V. H. (1964). Work and motivation. Wiley.

Wade, J. B., Porac, J. F., Pollock, T. G. & Graffin, S. D. (2006). The burden of celebrity: The impact of CEO certification contests on CEO pay and performance. Academy of Management Journal, 49(4), 643–660. doi: 10.5465/amj.2006.22083021

Washington, M. & Zajac, E. J. (2005). Status evolution and competition: Theory and evidence. Academy of Management Journal, 48(2), 282–296. doi: 10.5465/amj.2005.16928408

Zavyalova, A., Pfarrer, M. D., Reger, R. K. & Hubbard, T. D. (2016). Reputation as a benefit and a burden? How stakeholders’ organizational identification affects the role of reputation following a negative event. Academy of Management Journal, 59(1), 253–276. doi: 10.5465/amj.2013.0611