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Bigger may just be better when it comes to compensation in large corporations. This summer, John Zembron ’04 (Ridgefield, Conn.) researched whether corporate employees get their just economic desserts based upon the size of their employer’s firm.
Utilizing data supplied by a large human resources firm, Zembron, an economics and business major, examined whether chief executive officers and other employees are paid compensation that is congruent with their job and the scope of their responsibilities.
Zembron investigated the inner workings of corporate compensation under the guidance of Chris Ruebeck, assistant professor of economics and business, as part of Lafayette’s distinctive EXCEL Scholars program, in which students collaborate with faculty on research while earning a stipend. Lafayette is a national leader in undergraduate research. Many of the 180 students who participate in EXCEL each year go on to publish papers in scholarly journals and/or present their research at conferences.
“We had data,” says Ruebeck, “that went into detail not only for compensation, but it was broken down into base pay and bonus pay. Our raw data went all the way from the CEO to part-time employees. It included managers, staff, and human resource and legal staffs. Our study grew out of the work of economist Henry Moore, who in 1911 established the principle that larger firms pay their employees more. It was an empirical irregularity of economics that we wanted to examine.”
“I was playing economic detective to some degree,” says Zembron. “I accumulated the data and tried to understand it in terms of how we might actually use it. I was conversing with Professor Ruebeck as to what direction this data will take us. I filled in the holes, examining ambiguous areas.”
“We had a lot of variables to consider,” says Ruebeck. “That’s where John’s analysis and understanding of the data was a big help. For example, do larger companies require a better employee? If so, they would need better training. That suggested that corporate America should control for education and experience that pivots on a wage differential. Likewise, maybe we needed to control for certain employee characteristics. There were holes in the data that we tried to plug.”
An active scholar in his field, Ruebeck recently presented his research year to the European Association for Research in Industrial Economics, Madrid, Spain; North American Winter Meeting of the Econometric Society, Washington, D.C.; Stony Brook Summer Festival on Game Theory; and Lehigh University. He also recently published an article in The Economic and Social Review and The Southern Economic Journal.
What excited Zembron beyond the scope of the project was his relationship with Ruebeck. “I did a lot of the work on my own, but it was great to be in a situation where I could go to him with information or questions and we could hash them out together. He treated my ideas and my questions with respect and I felt more like a colleague than a student. It was just a great experience to be able to learn side-by-side with a professor who values your ideas.”
Zembron, who is eyeing graduate school with a career in marketing, sales or advertising as his long-term goal, says that the EXCEL Scholar program works “because of its built-in flexibility. Professors get students to help them with their projects; students get the invaluable experience of working with a professor on graduate-level research.”
Ruebeck says that Zembron, who is president of Chi Phi fraternity, is an ideal student “because he is open to free thinking. He learned that research can be messy and that it takes time before you simplify your final conclusions. He brought a different perspective to the project. John thought carefully about the theory which underlies the reality we study. He brought a careful approach to gathering the data and so decreased ‘the noise’ in our data. He’s taken three of my economic classes and to each one, just like this study, he brought solid economic insights.”
Zembron is also co-chair for the Orientation Committee, and serves as Student Council associate representative for the Athletics Committee. Last January, he learned the art of sales and marketing during a four-day externship with Michael Weisburger ’82, president of Weisburger Insurance in White Plains, N.Y. This summer he studied medieval art and architecture during a three-week Lafayette course in France.
He is a graduate of Ridgefield High School.
As a national leader in undergraduate research, Lafayette sends one of the largest contingents to the annual National Conference on Undergraduate Research each year. Over the past five years, more than 130 Lafayette students have presented results from their research with faculty mentors at the conference.