Results indicate that teams in the

Results indicate that teams in the NFL that choose to remain as far under the salary
cap as possible each year are doing their organizations and their fans a disservice,
assuming that their goal is to win more games. The results of incremental path analysis
using salary cap components as reported by the NFL indicate that a team’s ability to
win consistently is possible despite resource equivalence. A general indication is that
the closer your aggregate team compensation is to the salary cap, the more likely you
are to win. Results of the model tested show that cap percentage, total base salary, total
signing bonus, and mean base salary all contribute to win production in general
support of Hypothesis 1.
As expected, the allocation of signing bonuses does affect win production and is
shown to be a valuable tool in acquiring or stockpiling rare talent. cap precentage indicates that some teams win because they consistently use all of the financial
resources available to them each year, rather than get by at the league minimums. It
may also indicate that team owners or managers that do not push the limits of the cap
may have a utility acceptable to them other than winning. Several possibilities exist,
but profit may be a likely goal overriding wins. Total and mean base salaries are
significant, yet the number of players accruing salary to the cap have little variance,
due more commonly to injury or suspension. Because of this, these significant
differences in wins likely come not from the base payments, but from player
productivity, or heterogeneity of resources. Because the ultimate criterion of this study
is wins, this is a stronger indication that players are in fact paid for differences in their
performance than the simple fact that the data fits the model. Hypothesis 2 is thus
supported and echoes basic labor economic principles. While some individual players
may be overpaid or underpaid, there is a distribution of competencies among teams
that is explicated by aggregate pay levels.
Essentially, resource heterogeneity is the norm for human resources when it
comes to performance. Hunter and Schmidt (1989) showed that the standard
deviation of performance is always at least 20% of the mean. Further examination by
Hunter, Schmidt and Judiesch (1990) demonstrated this difference to be even larger
within high complexity jobs (as much as 46%). It could be argued then, that part of
the reason teams pay more for specialists is to reduce the possibility of variation in
performance, particularly when there is a specific competitive intent in mind. Highly
specialized performance that is interdependent, (i.e. in a team-based work
environment) makes “skill and resource deployments” (Reed & DeFillippi, 1990, pg.
92) ambiguous to the competition, which raise barriers to imitation. Thus, teams
help themselves by seeking and acquiring asset specificity (Williamson, 1985), and
are willing to pay for those aspects. This would appear to be equally valid for
managerial positions. This is very much in line with the resource-based view of the
firm. Generalizing from the perspective of the structural school, this hints that
managers might consider variable compensation systems that preserve the
immobility of those higher producing human resources. The process school posits
that rents can be and are produced by managerial resources. In this context, matching
specific player personnel with a well-defined strategy, and this interpretation may
account for much of the error variance in the model.
Some teams are somewhat superior in their ability to implement a strategic plan in
confluence with the resources at their disposal. Thus, it is possible that the ability not
only to select and compensate “better” players effectively, but also the ability to match
these players’ abilities, or more importantly, to develop personnel who can do many
things specifically toward the strategic intentions of the organization (or vice versa)
are the mechanisms by which an organization produces rents. Some teams win more
consistently because they are coached and/or managed better than others. This was the
findings of Wright, Smart and McMahan (1995) using basketball data and also the
finding of Kahn (1993) using professional baseball data. Better managers lead to more
wins, and individual player performance improves as the managerial quality improves.
Managerial quality includes the management and implementation of industrial
relations and human resource practices such as compensation, as well as coaching decision-making. While the literature examined sports industries, authors such as
Castanias and Helfat (2001) effectively generalized the concept of managerial quality
to apply in most industries.

Hasil (Bahasa Indonesia) 1:

Hasil menunjukkan bahwa tim di NFL yang memilih untuk tetap sebagai jauh di bawah gajitopi mungkin setiap tahun melakukan organisasi mereka dan penggemar mereka merugikan,dengan asumsi bahwa tujuan mereka adalah untuk memenangkan lebih banyak permainan. Hasil analisis jalur inkrementalmenggunakan gaji topi komponen seperti yang dilaporkan oleh NFL menunjukkan bahwa kemampuan tim untukmenang secara konsisten dimungkinkan meskipun sumber daya kesetaraan. Pertanda yang umum adalah bahwadekat kompensasi agregat tim Anda adalah untuk tutup gaji, semakin besar kemungkinan Andaakan menang. Hasil dari model yang diuji menunjukkan bahwa topi persentase total gaji pokok, totalpenandatanganan bonus, dan rata-rata gaji dasar semua berkontribusi untuk memenangkan produksi secara umumdukungan hipotesis 1.Seperti yang diharapkan, alokasi penandatanganan bonus mempengaruhi produksi menang danterbukti menjadi alat yang berharga dalam memperoleh atau menimbun bakat langka. topi precentage menunjukkan bahwa beberapa tim menang karena mereka secara konsisten menggunakan semua keuangansumber daya yang tersedia untuk mereka setiap tahun, daripada mendapatkan di Liga minimum. Itumungkin juga menunjukkan bahwa tim pemilik atau manajer yang mendorong batas-batas topimungkin memiliki utilitas yang diterima mereka selain pemenang. Ada beberapa kemungkinan,Tapi keuntungan mungkin mungkin tujuan override menang. Total dan berarti dasar gajisignifikan, namun jumlah pemain yang menghasilkan gaji ke topi memiliki sedikit varians,karena lebih umum cedera atau suspensi. Karena ini, ini pentingdifferences in wins likely come not from the base payments, but from playerproductivity, or heterogeneity of resources. Because the ultimate criterion of this studyis wins, this is a stronger indication that players are in fact paid for differences in theirperformance than the simple fact that the data fits the model. Hypothesis 2 is thussupported and echoes basic labor economic principles. While some individual playersmay be overpaid or underpaid, there is a distribution of competencies among teamsthat is explicated by aggregate pay levels.Essentially, resource heterogeneity is the norm for human resources when itcomes to performance. Hunter and Schmidt (1989) showed that the standarddeviation of performance is always at least 20% of the mean. Further examination byHunter, Schmidt and Judiesch (1990) demonstrated this difference to be even largerwithin high complexity jobs (as much as 46%). It could be argued then, that part ofthe reason teams pay more for specialists is to reduce the possibility of variation inperformance, particularly when there is a specific competitive intent in mind. Highlyspecialized performance that is interdependent, (i.e. in a team-based workenvironment) makes “skill and resource deployments” (Reed & DeFillippi, 1990, pg.92) ambiguous to the competition, which raise barriers to imitation. Thus, teamshelp themselves by seeking and acquiring asset specificity (Williamson, 1985), andare willing to pay for those aspects. This would appear to be equally valid formanagerial positions. This is very much in line with the resource-based view of thefirm. Generalizing from the perspective of the structural school, this hints thatmanagers might consider variable compensation systems that preserve theimmobility of those higher producing human resources. The process school positsthat rents can be and are produced by managerial resources. In this context, matchingspecific player personnel with a well-defined strategy, and this interpretation mayaccount for much of the error variance in the model.Some teams are somewhat superior in their ability to implement a strategic plan inconfluence with the resources at their disposal. Thus, it is possible that the ability notonly to select and compensate “better” players effectively, but also the ability to matchthese players’ abilities, or more importantly, to develop personnel who can do manythings specifically toward the strategic intentions of the organization (or vice versa)are the mechanisms by which an organization produces rents. Some teams win moreconsistently because they are coached and/or managed better than others. This was thefindings of Wright, Smart and McMahan (1995) using basketball data and also thefinding of Kahn (1993) using professional baseball data. Better managers lead to morewins, and individual player performance improves as the managerial quality improves.Managerial quality includes the management and implementation of industrialrelations and human resource practices such as compensation, as well as coaching decision-making. While the literature examined sports industries, authors such asCastanias and Helfat (2001) effectively generalized the concept of managerial qualityto apply in most industries.