TY - JOUR
T1 - A Multilevel Analysis of the Use of Individual Pay-for-Performance Systems
AU - Gooderham, Paul
AU - Fenton-O'Creevy, Mark
AU - Croucher, Richard
AU - Brookes, Michael
N1 - This is an Open Access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license http://creativecommons.org/licenses/by-nc/4.0/ .
PY - 2015/10/21
Y1 - 2015/10/21
N2 - Compensation systems, such as individualized pay-for-performance (I-PFP) schemes for employees, represent an important approach to aligning employer-employee interests. However, the adoption of I-PFP is much less common in many countries than in the United States. Employing a multilevel analysis of over 4,000 firms in 26 countries, we explore determinants of its adoption. At the country level, we distinguish between cultural and institutional (labor regulation institutions) influences. At the firm level, we distinguish firms that view human resources as strategically important and firms that are foreign owned. On the one hand, our findings indicate that both cultural and institutional effects at the country level significantly influence the adoption of I-PFP. On the other hand, senior managers’ agency counts. We find the effect of labor regulation on I-PFP to be mediated by its effects on labor union influence, and we find the effects of culture on I-PFP to be entirely mediated by labor regulation and (country-level) union influence.
AB - Compensation systems, such as individualized pay-for-performance (I-PFP) schemes for employees, represent an important approach to aligning employer-employee interests. However, the adoption of I-PFP is much less common in many countries than in the United States. Employing a multilevel analysis of over 4,000 firms in 26 countries, we explore determinants of its adoption. At the country level, we distinguish between cultural and institutional (labor regulation institutions) influences. At the firm level, we distinguish firms that view human resources as strategically important and firms that are foreign owned. On the one hand, our findings indicate that both cultural and institutional effects at the country level significantly influence the adoption of I-PFP. On the other hand, senior managers’ agency counts. We find the effect of labor regulation on I-PFP to be mediated by its effects on labor union influence, and we find the effects of culture on I-PFP to be entirely mediated by labor regulation and (country-level) union influence.
KW - compensation, bonuses, and benefits
KW - culture
KW - institutional theory
UR - http://www.scopus.com/inward/record.url?scp=85044142793&partnerID=8YFLogxK
U2 - 10.1177/0149206315610634
DO - 10.1177/0149206315610634
M3 - Article
VL - 44
SP - 1479
EP - 1504
JO - Journal of Management
JF - Journal of Management
IS - 4
ER -