Premium
Matching compensation and organizational strategies
Author(s) -
Balkin David B.,
GomezMejia Luis R.
Publication year - 1990
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250110207
Subject(s) - compensation (psychology) , strategic business unit , business , matching (statistics) , executive compensation , unit (ring theory) , marketing , function (biology) , industrial organization , organizational unit , organizational performance , human resource management , economics , management , finance , computer science , psychology , corporate governance , statistics , mathematics education , mathematics , computer security , evolutionary biology , psychoanalysis , biology
This study examines the impact of organizational strategies (at both the corporate and business unit level) on pay strategies, and their interactive influence on the effectiveness of the compensation system. The empirical findings are based on the survey responses of 192 human resource management executives in business units of large manufacturing firms. Corporate strategy was a significant predictor of pay package design, pay level relative to the market, and pay administration policies. Business unit strategy was a significant predictor of pay package design and pay level relative to the market. The findings are supportive of congruency notions which suggest that the effectiveness of the compensation system is partly a function of the fit between pay strategies and organizational strategies.