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Effectiveness of Individual and Aggregate Compensation Strategies
Author(s) -
GOMEZMEJIA LUIS R.,
BALKIN DAVID B.
Publication year - 1989
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.1989.tb00736.x
Subject(s) - incentive , compensation (psychology) , merit pay , willingness to pay , pay for performance , work (physics) , sample (material) , aggregate (composite) , variable (mathematics) , economics , psychology , business , marketing , actuarial science , social psychology , microeconomics , engineering , mechanical engineering , mathematical analysis , chemistry , materials science , mathematics , chromatography , composite material
Based on a sample of 175 scientists and engineers, this study shows that individual‐based rewards (either in the form of merit pay or individual bonuses) are perceived as less effective than aggregate incentive strategies for R & D workers. The pay effectiveness measures used here include pay satisfaction, propensity to leave, project performance, and individual performance. All things considered, team‐based bonuses are perceived as the most effective rewards in an R & D setting. The findings also indicate that employees with a low willingness to take risks are more likely to experience withdrawal cognition if they work for a firm that relies on variable compensation.