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Broad‐based incentive plans, HR practices and company performance
Author(s) -
Kroumova Maya K.,
Lazarova Mila B.
Publication year - 2009
Publication title -
human resource management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.44
H-Index - 77
eISSN - 1748-8583
pISSN - 0954-5395
DOI - 10.1111/j.1748-8583.2009.00111.x
Subject(s) - incentive , productivity , business , workforce , sample (material) , marketing , human resource management , knowledge management , industrial organization , economics , microeconomics , computer science , economic growth , chemistry , chromatography
The purpose of this paper is to further develop our knowledge of the complementarities between broad‐based incentives and human resource (HR) management practices, and their combined impact on company performance. We focus on three HR practices that are expected, separately and in combination, to enhance the effectiveness of broad‐based plans: information sharing, upward communication, and training in team skills. Using a sample of 305 Canadian firms, we find that companies with broad‐based incentive plans have lower levels of upward communication and higher levels of information sharing compared with companies that do not offer incentives to the majority of their workforce. Further, we find that companies with broad‐based incentive plans are more productive compared with companies with no such plans, and the presence of supporting HR practices increases their productivity advantage even further. In particular, upward communication combined with broad‐based incentives has a strong positive relationship with productivity.