The perceived profile of goal orientation within firms: Differences between employees working for successful and unsuccessful firms employing either performance-based pay or job-based pay

Abstract

The purpose of this study was to demonstrate that the perceived profile of goal orientation within firms differs as a function of compensation system and organizational success. An examination was made of the differences between employees working for economically successful and unsuccessful firms employing either performance-based pay or job-based pay. The dependent variables were employees' perceptions of the profile of goal orientation in their firm (performance approach, performance avoidance, and mastery). Survey data from 198 employees, representing 22 firms, demonstrate that performance-based pay compensation was related to employees' perceptions of a performance orientation in their firm, both approach oriented and avoidance oriented. Employees working for successful firms that employed performance-based pay, however, perceived a relatively strong performance-approach orientation in their firms, whereas their counterparts working for unsuccessful firms perceived a relatively high performance-avoidance orientation. Furthermore, the findings show that successful firms employing either performance-based pay or job-based pay were predominantly mastery oriented.