Organizational Reward Systems Research Articles

Risk taking in tournaments

Tournament theory provides important insights into organizational reward systems. It examines the incentive properties of reward systems based on rank‐order rather than absolute individual performance. Tournament theory may explain the pattern of managerial pay. It may also explain risk‐taking behavior by mutual fund managers. We use data from the PGA tour to examine the pattern of risk‐taking by professional golfers in an explicit tournament. The PGA tour provides a natural laboratory where such behavior can be studied. Our evidence shows that behavior by players in golf tournaments is consistent with the predictions of tournament theory.

Providing Patient-Focused Care Within a Managed Care and Pharmaceutical Care Environment: A Person/Situation Interactionist Model for Community Practitioners

OBJECTIVE: To propose an interactionist model of community pharmacists' patient-focused care to help researchers examine patient care activities under the twin paradigm changes of managed care and pharmaceutical care. SETTING: Community pharmacies. DESCRIPTION: The model suggests that more accurate predictions concerning community practitioners' patient care activities can be made by simultaneously examining both individual variables (e.g., self-efficacy) and situational variables (e.g., organizational reward system) than by examining either one separately. A major component of the model uses Kohlberg's cognitive moral development theory, which has been significantly and pragmatically linked to health professionals' clinical performance. Research propositions are offered and directions of future research discussed.

Managing the organizational aspects of electronic commerce

Electronic commerce should be viewed less as a phenomenon of business on-line and more as a challenge of organization redesign. Five general leading approaches to organization design are examined from the perspective of electronic commerce. A quasi-general organization design approach is proposed specifically for electronic commerce projects. The proposed approach emphasizes the organizational support for the electronic commerce strategy identification, network organization design, task design, and reward system design in the electronic commerce age.

Improving Marketing/Logistics Cross-Functional Collaboration in the Supply Chain

Currently, little is known about the internal (intrafirm) behaviors that may positively affect collaborative marketing/logistics integration, or about the benefits that may be associated with making these considerable investments. In short, what should firms be doing to promote marketing/logistics collaborative integration? What is the potential payoff? This paper addresses these questions by examining relationships between the organization's evaluation and reward system, cross-functional collaboration, effective marketing/logistics interdepartmental integration, and distribution service performance.

The use of public attitude surveys: what can they tell police managers?

In recent times, police policy makers have been encouraged to use public opinion surveys to identify, and target the allocation of resources to, activities that members of the public believe are important. However, these surveys have concentrated on the types of problems that the public would like addressed, and have not determined what types of activities they would prefer the police to be undertaking. In the present study, a comprehensive list of police activities formed the basis of a survey used to examine attitudes toward police priorities in Australia. Comparisons were made between police and public understanding of the police role, and between present and preferred priorities. The results suggest that the public has an understanding of policing which differs from that of police officers. However, the picture of what they want police to be doing is similar to that of the police, albeit giving higher priorities to almost all of the activities. Police managers may need to educate the public about the functions of the police service, emphasizing functions other than investigating crime and providing advice. At the same time, the police may need to alter their resource allocation and modify organizational structure and reward systems to encourage operational officers to be more involved in the activities that the public see as high priority. This should result in better ties with the community, a better understanding within the community of the police role, and more realistic expectations on both sides of the outcomes of policing.

The Hidden Competencies of Healthcare: Why Self-Esteem, Accountability, and Professionalism May Affect Hospital Customer Satisfaction Scores

Data from 103 for-profit, nonprofit, and government-owned hospitals, spread across about half of the United States clearly show that there are common elements and several core competencies in all hospitals, some probably driven by JCAHO accreditation standards, but others coming from universal experience stemming from the changes in healthcare. The common competencies that are not, in my opinion, driven directly by the JCAHO standards include professionalism, accountability, self-esteem, customer service/focus, communication, information management/using data in decision making, and teamwork. There are several possible connections among the core competencies that suggest that the effects of accountability and possibly self-esteem on such outcomes as patient satisfaction and quality of care should be the subject of more research in healthcare settings. There are, however, several possible interventions to increase the core competency base of any hospital, which can be applied without this research. Executives and managers who attempt to measure and change these common competencies through selection, assessment, organizational system change, or reward and compensation systems will change the competence base of their workforce in critical areas needed in the future healthcare economy. Using a competence model incorporating these competencies may change the culture of the organization toward that which will be needed for survival in the twenty-first century.

Reward systems: Emerging trends and issues.

Abstract In response to the emerging environmental pressures, organizations are transforming their structures and management systems. As a result, many organizations are rethinking their reward strategies to better align them with the new realities. This paper provides an overview of key considerations that must be kept in mind in developing organizational reward systems. Against this background, it examines four alternative approaches to rewards that have been recently suggested in the literature. These include skill-based pay, broadbanding, variable pay, and team rewards. The paper highlights relevant design issues that need to be addressed in developing and implementing these approaches. Today's organizations are faced with a highly dynamic, complex and competitive environment. In order to cope with this environment, organizations are undergoing fundamental changes in their structures and management systems. In this paper, we focus on the impact of these changes on employee reward systems. We begin by providing an overview of key requirements for effectiveness of reward systems. Next, we describe the prevailing reward systems in organizations and the pressures on these systems to change. We then provide a detailed discussion on selected new approaches to rewards. For each approach, the underlying logic is explained, the available evidence on its usage and experience is examined, and key design and implementation issues are highlighted.Designing Effective Reward SystemsThe primary purpose of organizational reward systems is to influence two types of employee behaviours: membership and performance. The former includes such behaviours as joining the organization, remaining with the organization, and coming to work regularly and punctually. The latter comprises the entire range of behaviours required in the performance of a given job or role. The specific context of each organization will determine the relative importance to be placed on membership and performance behaviours. For example, employee membership behaviours may be more important than performance behaviours to an organization that operates in a tight labour market or operates at a remote, undesirable location or employs technology which drastically limits the scope for variability in employee performance. The reverse might be true in other situations. Which specific membership and performance behaviours will be important will also depend upon the organizational context. For example, using the typology of business strategy developed by Miles & Snow (1984), one could argue that a different mix of specific job performance behaviours will be appropriate for a prospector organization that focusses on new products, markets, and technologies than a defender organization operating in stable markets and focussing on efficiency. The former will likely place greater emphasis on creative, risk-taking, and team-based behaviours while the latter on consistent, standardized, and cost-saving behaviours.In order to be effective in influencing behaviour, reward systems should satisfy three key design requirements. These requirements are derived from established behavioural science theories and research. The first requirement is that appropriate behaviour-reward contingencies be established i.e., rewards should be made contingent upon specific behaviours that are of importance to the organization. Reinforcement theory suggests that a response followed by a reward is more likely to occur in the future. Applied to organizational settings, the theory implies that employees learn to behave in ways that get rewarded and avoid behaviour that does not get rewarded (Lawler, 1981). The basis of learning here is the employee actually experiencing rewards following desired behaviour. Expectancy theory (Lawler, 1973; and Vroom, 1995) also emphasizes the importance of behaviour-reward relationships as a key motivational factor but it focusses more on expected rather than experienced rewards. …

Content‐Domain Confusion among Researchers, Managers, and Union Members Regarding Organizational Citizenship Behaviour

AbstractThis study investigated perceptions among different subject matter expert groups (SMEs) about the representation and meaning of organizational citizenship behaviour (OCB) scale items relative to items assessing altruism, collectivism, and organizational commitment. OCB researchers, human resource management/organizational behaviour academics, managers and union members evaluated the extent to which different items defined each of these four constructs. The results showed that only OCB researchers could distinguish OCB items from the other three content domains. Managers were only able to distinguish OCB items from altruism. Union members perceived the OCB scale items to be as indicative of altruism, collectivism, and organizational commitment as they are of OCB. Human resources management/ organizational behaviour academics perceived OCB items to be as indicative of collectivism and organizational commitment as they are of OCB. Thus it would appear that items that purportedly measure OCB are not perceived as falling in a unique content domain.RésuméLa présente recherche étudie les perceptions de quatre groupes d'experts quant à la représentation et la signification données à des caractéristiques du comportement organisationnel de volontariat (OCB) comparativement à celles de l'altruisme, du collectivisme, et de l'engagement organisationnel. Des chercheurs en OCB, des pro‐fesseurs en gestion des ressources humaines et en comportement organisationnel (GRH/CO), des gestionnaires et du personnel syndiqué ont évalué dans quelle mesure les différentes caractéristiques définissaient bien chacun des quatre construits. Les résultats indiquent que seuls les chercheurs en OCB ont pu distinguer les caractéristiques d'OCB de celles des trois autres construits. Les gestionnaires ont pu les différencier de celles du concept d'altruisme. Lepersonnel syndiqué les a perçues comme étant à lafois indicateurs d'altruisme, de collectivisme, d'engagement organisationnel et d'OCB. Les pro‐fesseurs en GRH/CO les ont jugées aussi bien indicateurs d'OCB que de collectivisme et d'engagement organisationnel. En résumé, il semble que les caractéristiques censées définir le concept d'OCB ne sontpas perçues comme lefait d'un construit unique.

Organizational Spontaneity in Context

This article suggests that our understanding of extra-role behaviors such as organiza- tional spontaneity may be enhanced by considering the context in which these behaviors occur. The context may provide individuals with either opportunities to engage in forms of organizational spontaneity or constraints against performing these behaviors. Proposed contextual influences at the individual level of analysis include skill level, self-efficacy, role definitions, interpersonal relationships, and help-seek- ing behavior. Proposed contextual influences at the group level of analysis are group norms, interdependence, and goals. Proposed contextual influences at the organiza- tional level of analysis include organizational structure, culture, company policies, and reward systems. Lastly, proposed contextual influences at the interorganizational level of analysis include the isomorphic forces that result in organizations becoming more similar to each other over time. Implications of this analysis for future theorizing and research are discussed.

Whistleblowers and informants — Part 2

This, the final part of the article, considers how to give employees the confidence to go about whistleblowing when there is just cause. By actively having an Employee Suggestion Programme employees should at least be aware of the procedures they can follow. Employers must create an environment that encourages employees to recognize and respond appropriately. Standards and codes of ethics must also become part of the organizational culture and reward system.

Careers in the third sector

AbstractThe article explores the concept of career as it relates to third‐sector employees. The results of a survey of third‐sector employees in New South Wales, Australia, suggests a distinctive pattern of work orientation involving a preference for work that is both personally challenging and socially meaningful. Pragmatic considerations are also important for women with young children. These and other findings suggest that the majority of third‐sector employees pursue a career that more closely fits Driver's spiral career model rather than the conventional linear career model. It therefore behooves nonprofit employers to tailor the organizational reward system to the motivational needs of their employees if they hope to maximize worker satisfaction and effectiveness.

Organizational Citizenship Behaviour and Performance in a University Setting

AbstractThe critical incident technique was used to develop measures of organizational citizenship behaviour (OCB) in a business school. The results were generalizable to a second business school and a psychology department in a third university. Confirmatory factor analysis revealed that OCB has an institutional and a collegial component. Peer evaluations of faculty (n=71) revealed that OCB directed at the institution correlated negatively with a faculty member's number of publications (r=‐.33) and years on the job (r=‐.32). OCB directed at colleagues and students correlated positively with number of publications (r=.38).RésuméLa technique de l'incident critique a éré utilisée pour le développement de mesures de comportement organi‐sationnel de volontariat (OCB) dans une faculté d'administration. Les résultats ont pu ětre généralisés à une seconde faculté d'administration et à un département de psychologie dans une troisième université. Une analyse factorielle confirmatoire a révélé deux dimensions pour l'OCB: une dimension institutionelle et une dimension collégiale. Une évaluation par les paires de certains membres de la faculté (n=71) a indiqé que l'OCB dirigé vers l'institution est associé négativement avec le nombre de publications d'un membre de la faculté (r=‐.33) ainsi qu'avec le nombre d'années à l'emploi de la faculté (r=‐.32). Par contre, l'OCB dirigé vers les collègues et étudiants a démontré une corrélation positive avec le nombre de publications (r=.38).

Merging strategic safety, health and environment into total quality management

The philosophy of Total Quality Management (TQM) appears to be a major force in the reshaping of the U.S. industry. Increasingly, internal customers (e.g. workers) require work environments that are safe, healthy and environmentally benign. On the other hand, external customers require products and services that are safe and present no negative environmental consequences. Thus, it is suggested to integrate long-range safety planning into the current TQM efforts. First, the concept of Strategic Safety Management (SSM) is proposed to merge these two approaches. Then, the main features of SSM are presented. Self-managed team work is described as an essential linking component of this integration to promote long-term safety and quality improvements. Certain aspects of an organization's performance measurement and reward (merit) system are also highlighted within the SSM framework. Due to its “total” systems approach and its long-range planning and implementation requirements, there are many obstacles to its full effective operation. Many of these problems are briefly mentioned. Finally, potential for its success in smaller organizations is presented.

Putting the Work Back into Work/Family

This article locates the source of the work/family conflict in our shared underlying assumptions about how work must be done if one is to succeed. Based on a 6-month field study of engineers in a Fortune 100 company, three barriers to the successful implementation of work/family policies and programs were identified. Examining the source of these barriers reveals an assumption that individuals must be present at work to succeed. Gidden's theory of structuration is applied to explain why this assumption perpetuates. The article further indicates that to alter this assumption will require rethinking the organization's reward system and the recurrence of impromptu interactions that result. At the end, the article suggests that surfacing this and other underlying assumptions about work has potential benefits for organizations, as well as individuals.

Person‐based reward systems: A theory of organizational reward practices in reform‐communist organizations

AbstractA type of organizational reward system based on personal power is described and partially tested. The theory, developed from observations of Hungarian organizations, is grounded in theories of procedural justice and learned helplessness. Person‐based organizational reward systems are characterized by highly valued rewards combined with personalistic criteria for reward distribution. Such organizational reward systems were hypothesized to lead to employee perceptions of organizational unfairness; negative evaluations of others; anxiety; and perceptions of self, collegial and organizational inefficacy. These hypotheses were supported in tests in a sample of three Hungarian state‐owned organizations classified as having person‐based systems and five non‐person‐based organizations (two Hungarian privately‐owned companies, one American state‐owned and two American privately‐owned organizations). In addition, several behavioral effects of person‐based reward systems were proposed: they foster bargaining behavior, withholding of information, avoidance of collaborative tasks, ingratiation and noncompliance with rules.

Forecasting Practices in US Corporations: Survey Results

By surveying current forecasting practices at 500 US corporations, we explored the reasons managers rely heavily on judgmental forecasting methods and attempted to identify what needs of practitioners are not met with current procedures. Although managers are more familiar with quantitative forecasting methods than in the past, the level of usage has not increased. Practitioners continue to rely largely on judgmental forecasting methods. The major obstacles cited to the use of formal forecasting are lack of relevant data and low organizational support. Further, when quantitative forecasting methods are used, they frequently are judgmentally adjusted. Most practitioners prefer a bias in the forecast that is related to the organizational reward system.

REWARD SYSTEMS IN TOTAL QUALITY MANAGEMENT IN THE PACIFIC BASIN

Reward systems provide a number of important functions in the organization including motivating active participation of organizational members, meeting role expectations, and motivating innovation and strong commitment to the organization (Steers and Porter, 1991). Organizations worldwide are actively grappling with the translation of Deming's (1986) fourteen principles into their own unique versions of Total Quality Management. As they proceed through the stages of transforming their organizational cultures toward continuous quality improvement, they have evolved a number of reward mechanisms to assimilate workers into the TQM culture and to maintain workers' efforts toward continuous quality improvement goals. The present article examines the reward systems in several organizations in the Pacific Basin, which was chosen because of the increasing emphasis upon quality taken by companies in Australia, Asia, and the western U.S.

Justice, motivation, and performance beyond role requirements

This article focuses on the possible instrumental characteristics of extrarole behaviours. Specifically, the motivation to perform beyond role requirements for future rewards is discussed. It is first argued that the motivation to engage in extrarole behaviors may stem from a reaction to inequity, or from a desire to receive rewards that cannot be achieved through the performance of official role requirements. Then, using data from two recent studies as support, it is proposed that these extrarole behaviors will only occur if the organizational reward system operates in a just, procedurally fair manner. Finally, the conceptual issues of how procedural justice might contribute to intrapreneurship and entrepreneurship are discussed.

Implementation of CIM technology: The key role of organizational learning

AbstractThis article develops a conceptual model by which to examine the relationship between effective implementation of CIM technology with different levels and characteristics of organizational learning. Although a large number of firms have invested enormous sums into CIM and other advanced manufacturing technologies recently, many have not been able to garner the full potential of these investments to produce high variety at low cost. This article contends that successful implementation and utilization of CIM require a commensurate organizational commitment to instill double‐loop learning in which experimentation, risk‐taking, and an open‐systems perspective become the basis for redesigning organizational structures, reward systems, and human resource practices. Firms that are locked into patterns of single‐loop learning in which organizational change is resisted face the greatest difficulties in making the transition from traditional to advanced manufacturing technologies.

Process and Outcome: Perspectives on the Distribution of Rewards in Organizations

James N. Baron Stanford University Karen S. Cook University of Washington Gaining a better understanding of reward systems in organizations has become a high priority, not only for scholars in diverse disciplines but also, increasingly, for managers, human resource specialists, and those who craft public policy. Organizations are claimed to be undergoing a period of unprecedented experimentation in appraising and rewarding employees. In the current presidential campaign, candidates are staking out positions on levels of U.S. executive compensation. Journalistic accounts contrasting American greed and individualism with the strong group ethic and compressed reward distributions of Japan and other countries have become hackneyed.