Strategic Management Journal (2001)

Author: Boyd, B.K., Salamin, A.

Date: 2001

Title: Strategic reward systems: a contingency model of pay system design

Abstract: A limited number of studies have addressed the idea of "strategic" reward systems Ė the matching of compensation systems to a firmís strategy. Prior research on this topic has been confined to US firms, however, and a number of key questions remain unanswered. Using a sample of 917 employees from two large Swiss financial institutions, we found that pay systems are linked with divisional strategic orientation, but in a different form than prior studies. Additionally, we identify hierarchical position as an important variable in the tailoring of reward systems. Hierarchy has a significant main effect on pay plan design, and an interactive effect with strategic orientation.

Keywords:

compensation

managerial discretion

strategy implementation

contingency models

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