With the competitive landscape becoming increasingly difficult, companies are looking for ways to optimize employee effort and performance. One mechanism used by many companies is pay-for-performance, linking compensation directly to performance. A Norwegian study investigated the role of base pay and variable pay-for-performance plans in the Insurance industry over a 2-year period, and found that such compensation plans can lead to increased effort and deceased turnover intentions, but via employee job motivation.
Key Topics: Pay-for-performance; Employee motivation; Employee effort; Turnover intention
In many sectors, particularly those with primarily low-skilled jobs, the use of temporary and often migrant workers is on the rise. While there are certain benefits to companies in using temporary migrant workers, their use may come at a cost. A study of the UK food manufacturing sector examined employee absence rates and the tools companies use to reduce absence issues. The results showed that companies were predominantly using punishment rather than reward techniques to combat absence. This study also found that settled migrant workers had similar absence behaviour to native workers, while newer transitory type migrant workers had less job commitment and were more likely to be absent from work.
Key Topics: Absence management; Temporary workers; Migration
The relationship between incentives and employee performance is well documented, but what role do employee needs play in this? A recent US study examined the role of the human needs for autonomy, competence, and relatedness, in incentivized performance contexts and found them to be contributing factors in predicting performance. This study also found that the relationship between performance and need satisfaction was moderated by the extent to which incentives were directly linked to performance.
Key Topics: Employee motivation; Employee needs; Rewards; Productivity; Autonomy; Competence; Relatedness
The effect of variable compensation on job performance has been well established, although the examination of incentive plans relating to performance against budget targets has received limited attention. A study of the Australian manufacturing sector examined the role of organizational commitment and trust-in-supervisor in the relationship between budget-based incentive compensation schemes and employee job performance and found that such schemes can lead to greater trust-in-supervisor, which in turn leads to greater subordinate job performance and organizational commitment.
Key Topics: Variable compensation plans; Trust-in-supervisor; Organizational commitment; Job performance
With equity-based compensation becoming increasingly prevalent below senior management level in companies, a recent study looked at the relationship between equity-based employee incentives and cross-business-unit collaboration in multi-business companies. The results indicate that providing more junior level managers with equity incentives, in addition to profit-based incentive compensation, can elicit higher collaboration. The findings also suggest that equity-based incentives are generally of greater benefit to large companies in high-growth sectors, for companies chasing a related diversification strategy, and in stock market growth periods.
Key Topics: Equity; Long term incentives; Collaboration; Teamwork
There has been much debate by practitioners and academics alike on whether rewarding creativity is effective. To further the analysis of this dynamic, a study in China examined the relationship between creativity, reward, and performance. The researchers reviewed specific dimensions of creativity, and found that rewarding creativity can influence the type of creativity that is expressed.
Key Topics: Creativity; Performance; Compensation |
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