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Effects of Personality on Individual Earnings: Leadership Role Occupancy as a Mediator

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Abstract

Purpose

The purpose of this study was to investigate the direct and indirect effects of personality characteristics on individual earnings and to examine a person’s leadership role occupancy as the potential mediator in the personality–earnings relationship.

Design/Methodology/Approach

Longitudinal survey data were collected from a sample of 209 individuals. Earnings were measured 6 years after the personality variables.

Findings

Two personality traits, i.e., Social Potency and Achievement, predict individual earnings longitudinally. The effects of personality were partially mediated by the person’s occupancy of leadership roles in the workplace. For those occupying similar leadership positions, people higher in social potency still have greater earnings.

Implications

These findings lend support for personality assessment in personnel selection and have important implications for leadership development and individual career success.

Originality/Value

Previous research suggests that personality influences individual earnings beyond the effects of traditional human capital variables. This study is among the first to distinguish personality’s direct and indirect (through leadership role occupancy) effects on individual earnings. The findings provide direct support for the incentive-enhancing property of personality as well as indirect support for the trait activation theory on the personality–earnings relationship.

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Notes

  1. A subset of the data has been used in an earlier study on genetic influence on personality and leadership, which was published elsewhere. However, the current study asks unique research questions that were not examined in the previous study.

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Authors and Affiliations

  1. Department of Management, W. P. Carey School of Business, Arizona State University, P.O. Box 37100, Phoenix, AZ, 85069-7100, USA

    Zhen Zhang

  2. Department of Management & Organization, Business School, National University of Singapore, 1 Business Link, BIZ 2 Bldg, #04–05, Singapore, 117592, Singapore

    Richard D. Arvey

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  1. Zhen Zhang
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  2. Richard D. Arvey
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Correspondence to Zhen Zhang.

Additional information

Received and reviewed by former editor, George Neuman.

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Zhang, Z., Arvey, R.D. Effects of Personality on Individual Earnings: Leadership Role Occupancy as a Mediator. J Bus Psychol 24, 271–280 (2009). https://doi.org/10.1007/s10869-009-9105-5

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