Compensation Management in Outsourced Service Organizations and Its Implications for Quit Rates, Absenteeism and Workforce Performance: Evidence from Canadian Call Centres

Abstract

Abstract We investigate compensation management in in‐house and outsourced call centres with original establishment‐level data collected in Canada. Our analysis reveals that both customer service representatives (CSRs) and managers employed in outsourced call centres earn 91 per cent of the cash pay earned by their in‐house counterparts. Lower cash pay levels in outsourced call centres are related to higher CSR quit rates and absenteeism. Although CSR cash pay is associated with improved workforce performance, the disparity in cash pay between in‐house and outsourced call centres does not result in a significant difference in workforce performance.

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