| A Goal-setting Framework for Gainsharing Effectiveness |
| | Hollensbe, Elaine C. | U. of Kansas | e-hollensbe@ukans.edu | (785)-864-7521 |
| | Guthrie, James P. | U. of Kansas | jguthrie@bschool.wpo.ukans.edu | 785-864-7546 |
| | Gainsharing as a compensation strategy is being increasingly used by firms to
achieve productivity gains, increased teamwork, decreased errors, and other organizational
benefits. Although the effectiveness of gainsharing plans has been anecdotally and empirically
documented, little is known about the specific mechanisms through which performance gains
are realized. This study proposes a goal-setting framework as a theoretical explanation for
gainsharing effectiveness. A conceptual model suggests group-level and gainsharing-plan
variables that may influence the level of gainsharing goal commitment and, hence, group
performance. Propositions for further research and practical implications are
discussed. |
| | Keywords: Gainsharing; Goal-setting; Compensation |
| The Cost of Agency: The Effect of Managerial Stockholdings on Employee Participation in Company Financial Returns |
| | Liu, Nien-Chi | National Tsinghua U. | nliu@ie.nthu.edu.tw | (886)-3574-2927 |
| | Ben-Ner, Avner | U. of Minnesota | abenner@csom.umn.edu | (612)-624-0867 |
| | Since the early 1980s, the role of variable current and deferred compensation has increased significantly. The change has come in the form of ESOPs,
profit sharing, group bonuses, and other forms of collective incentives that provide for employee participation in financial returns on the basis of group
rather than individual results. What has precipitated this shift?
There are several factors at play. In this paper we concentrate on the role played by the agency relationship between company owners and managers for
the choice of collective incentive schemes for employees. We hypothesize that owners will not try to eliminate agency problems at all organizational
levels, but only share their residual rights with one specific group of agents - managers or employees. We emphasize the role of workplace contingencies,
particularly the presence of employee involvement programs, and various institutional environments.
We develop and then test hypotheses, using a pooled cross-section and time-series data set containing 495 observations based on a sample of 86
publicly-traded Minnesota manufacturing firms over the 1987-1994 period.
The empirical findings, which provide broad support for our hypotheses, are as follows. First, we find evidence of a positive statistical relationship
between the adoption of employee participation in decision-making practices and of employee participation in financial returns. Second, there are
substitution possibilities between the level of managerial stockholdings and employee participation in financial return practices. Finally, the results
reveal that such substitution effects between management and collective incentive schemes become more substantial when cooperation is more emphasized
in the workplace.
|
| | Keywords: collective incentives; managerial incentives; agency relationship |
| How Do Company Differences in Pay for Performance Strategy Influence Intrinsic Motivation, Extrinsic Motivation, and Overall Motive? |
| | Fang, Meiyu | National Central U. | mfang@cc.ncu.edu.tw | +886-3-427-2038 |
| | Gerhart, Barry A. | Vanderbilt U. | barry.gerhart@vanderbilt.edu | 615-322-2534 |
| | Recent papers continue to argue that extrinsic rewards undermine intrinsic motivation in the workplace. However, much of the
evidence for such a claim is based on settings (schools) and subjects (schoolchildren) that are sufficiently different that the findings
may not generalize to workplace settings. Our goal was to examine the influence of company differences in pay for performance
strategy on intrinsic, extrinsic, and overall motivation. Contrary to warnings that pay for performance undermines motivation, we
found that in companies having stronger links between pay and performance, employees had higher levels of extrinsic, intrinsic,
and overall motivation. |
| | Keywords: Motivation; Compensation |
| A Comparative Examination of Traditional and Non-Traditional Compensation Systems |
| | Mitra, Atul | Lyon College | mitra@lyon.edu | (870)-698-4239 |
| | Gupta, Nina | U. of Arkansas, Fayetteville | ngupta@comp.uark.edu | (501)-575-6233 |
| | In this paper, we examined the impact of job-based, market-based, and
skill-based pay plans on seven mid-range organizational outcomes in about
200 organizations representing various industries. The four
organizational-level mid-range outcomes included workforce flexibility,
compensation costs, output, and overall success. The three individual-level
mid-range outcomes considered were motivation, attitudes, and membership
behaviors. We also examined the interactive impact of the compensation
systems and three contingency variables on the outcomes. We considered
the type of technology, employee involvement, and consistency with other
organizational characteristics as contingency variables. The hypothesized
relationships were tested using hierarchical regression analysis. Results
support a significant and positive impact of skill-based pay plans on
workforce flexibility, organizational output, employee motivation, and
employee attitudes. Furthermore, skill-based pay plans were found to be
more successful than job-based or market-based pay plans. There was only
marginal support for the superior effects of skill-based plans on
membership. Compensation costs for the three types of compensation pay
plans were not significantly different. In addition, no interactions with
contingency variables reached significance. The implications of these
results for research and practice are discussed.
|
| | Keywords: Compensation systems; Traditional; Non-traditional |