When it comes to eliciting the best from their employees, companies are increasingly moving toward pay for performance reward strategies, which focus on rewarding employees’ job skills, knowledge, competencies and productivity. A recent Malaysian study sought to understand factors influencing perceived unfairness of such reward practices and found that elements such as effective communication, participation, and performance appraisals can have a significant impact on perceived fairness by employees.
Key Topics: Job satisfaction, Performance appraisal, Performance based reward
Does employee compensation level influence their future treatment by organizations? A recent study examining players in the NFL sought to understand if players in which organizations had made a greater financial commitment received preferential treatment through more game time. The results indicated that higher compensated players did receive more game time but were no more productive on the field that than their lower compensated colleagues, suggesting that their additional game time was related to bias due to the investment the team had made in them.
Key Topics: Compensation bias; Employee performance
Barcelona and Real Madrid are dominant forces in world soccer as well as domestically in Spain, but what role does reward management play in their success and what can organizations learn from their successful team reward strategies? With organizations increasingly utilizing team work in order to increase company performance and competitive advantage there are some key lessons that they can learn from two of the most successful teams in world sport today.
Key Topics: Team performance; Pay-for-performance; Pay dispersion, Merit pay; Bonuses
The importance of HR practices in directing employee behavior is in little doubt, however employees’ perceptions of HR practices, such as pay for performance, can often differ considerably, making it difficult for companies to predict how they will influence behavior. Examining the variability in employees’ perceptions of HR practices, a study of employees in the Insurance and Public sectors found that employees’ perceptions of HR practices were closely related to managers’ and coworkers’ perceptions of HR practices, with those more demographically similar to employees having the greatest influence over their perceptions of HR practices.
Key Topics: Perceptions of HR practices; Demographic similarity
Do employees really care about what their peers earn? A German study examined the effect of the compensation level of comparable peers on the job satisfaction of managers in the chemicals industry over a five-year period and found that their job satisfaction levels were indeed affected by peer compensation, both in their own company and in the industry more broadly. The effects were found to differ across a number of key criteria, including gender and age.
Key Topics: Social comparison; Job satisfaction; Compensation; Benchmarking
Effectively managing employee turnover is a primary concern for many companies, as they try to retain their most talented employees. Effective turnover management can be particularly important when it comes to the CEO’s top team, as their departure can often have a significant impact on overall company performance. A study of Standard & Poor’s 500 companies from 1994 to 2008 examined the impact of pay dispersion, pay disparity, and pay level relative to the market on executive turnover, and found that not only did these factors significantly impact turnover but that they interacted in interesting ways to increase or decrease turnover levels.
Key Topics: Executive compensation; Benchmarking; Pay disparity; Pay dispersion; Turnover
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