One of the cornerstones of modern performance management is the concept of pay based on the achievement of goals, but the role of performance expectations is less well defined. A study examining the effect of performance expectations on the total compensation of professional US football coaches found that compensation increases when performance expectations are exceeded. While on-field as well as off’-field performance measures were found to affect total compensation of coaches.
Key Topics: Performance expectations; Coaching; Executive compensation
The determination of CEO compensation is often a difficult and contentious one. A study at the University of Illinois looked into companies’ use of peer benchmarking information in determining the compensation of their CEO and explored the social-psychological mechanisms which can explain compensation adjustments. The results found that CEO power moderates the relationship between a CEO’s compensation and the compensation of their peers, with CEO with greater power better able to push for benchmarking and higher compensation. Pay inequality versus peers was also found to be a strong motivator for CEOs to restore compensation equity.
Key Topics: CEO compensation; Benchmarking; Managerial power
Salespeople are often painted as being only interested in making money. A study of US salespeople looked at the impact on employee performance of three organizational reward types frequently used by companies to motivate and engage employees, namely financial incentives, recognition, and feedback. Examining sales employees in the retail sector, the results indicated that all three reward types increased employee performance, and that financial incentives and recognition were substitutes, with feedback being independent of the other incentive types.
Key Topics: Monetary incentives; Feedback; Recognition; Sales performance
Performance-based incentive systems are becoming increasingly prevalent for academics in universities globally. A Korean study assessed the success of such a system over a nine-year period and found that increased financial rewards led to increases in both the quality and quantity of work by university academics.
Key Topics: Pay for performance; Incentives; Academics
Non-profit companies are often under considerable scrutiny from potential donors when deciding if and how much to donate. A recent study looked at the relationship between employee compensation in non-profit companies, donations to those companies, and company financial performance. The results suggest that when employees of non-profit companies are paid above the market median, this has a negative impact on donations. This negative effect appears to be mitigated by sound financial performance however.
Key Topics: Financial performance; Non-profit; Compensation