Organizational Reward Systems Research Articles

The Incentive Effects of Tournament Compensation Systems

Brian E. Becker and Mark A. Huselid State University of New York at Buffalo Tournament models have developed into an important component of the theoretical literature on organizational reward systems. However, with one exception there have been no empirical tests of the incentive effects of tournament models in a field setting. Drawing on a panel data set from auto racing, we show that the tournament spread (prize differential) does have incentive effects on both individual performance and driver safety, that these effects peak at higher spreads, and that controlling for the dollar value of the tournament spread, the prize distribution has little influence on individual performance.

A comparison of men and women managers' and nonmanagers' perceptions of success

AbstractThis study examined the importance attached to six dimensions of life success by 756 U.S. managerial and nonmanagerial women and men. Among managers, women attached more importance than did men to personal fulfillment and security. Among nonmanagers, women scored higher than men on the importance of family relationships and personal fulfillment, but lower than men in status/wealth. A comparison of managers and nonmanagers showed differences in only two life success dimensions: status/wealth and professional fulfillment were more important to managerial than to nonmanagerial women. Men respondents at both levels reported no significant differences. Implications are directed to those responsible for organizational reward systems.

Executive Courage Across Cultures: An Organizational Perspective

Executive courage is an important cultural variable that influences the survival of a business organization in an increasingly competitive global business environment. This study presents the results of an empirical cross‐cultural investigation of executive courage. Forty American and 29 Arab executives participated in the study. Nine hypotheses were tested. Results indicated that the two samples exhibited significant differences with regard to their perceptions of the dimensions of executive courage, the role of executive courage in today's business organization, the relative importance of personal growth and personal courage, and the interaction between executive courage and the organizational reward system. It is concluded that executive courage is a positive cross‐cultural force, deserving careful consideration by researchers and practitioners. It is also concluded that business organizations can best serve their need for survival by rewarding those who seek to do the right things, rather than those who do the expected things right.

Perestroika in the USSR and China

Recent leaders of the USSR and China saw the inherited Stalinist blueprint as defective for managing state enterprises. To remedy enterprise inefficiencies, various reforms were begun. Review of the Soviet and Chinese prereform economic designs indicates that the misuse of resources was prompted by unconditional state support of enterprises coupled with guaranteed employment and flawed incentive criteria. Perestroika plans in both countries were directly aimed at undoing these relationships. Leaders' expectations of soaring inflation and mounting unemployment, however, have put the restructuring plans on hold. It seems that Soviet and Chinese citizens want the gains of reform without the pains, but neither nation's economy is likely to fulfill that wish. Drawing on the Soviet and Chinese experience, some guidelines for U.S. firms' renewal efforts are suggested. Secure employment was not the culprit in the command economies. Indeed, job security offers U.S. companies substantial advantages. And in the Soviet and Chinese experience, it can be seen that organizational reward systems may foster or hinder productivity gains. It is concluded that job security, when meshed with some form of profit sharing, provides the necessary situational context for members' support of productivity and quality improvement programs.

Building organizational commitment: A multifirm study

Although much research has been conducted in the area of organizational commitment, few studies have explicitly examined how organizations facilitate commitment among members. Using a sample of 291 respondents from 45 firms, the results of this study show that rigorous recruitment and selection procedures and a strong, clear organizational value system are associated with higher levels of employee commitment based on internalization and identification. Strong organizational career and reward systems are related to higher levels of instrumental or compliance‐based commitment.

DO PEOPLE MAKE THE PLACE? AN EXAMINATION OF THE ATTRACTION‐SELECTION‐ATTRITION HYPOTHESIS

This study tests the hypotheses that (1) congruence between internal need states and external environments drives the organizational‐choice process and (2) those attracted to particular organizations are more homogeneous than the applicant pool in general. Subjects were evaluated on 14 needs using the Jackson Personality Research Form. They then viewed two video‐taped segments of simulated campus interviews to gain information about two distinct types of organizational reward systems. The interview segments entered the discussion in progress to avoid any reference to a particular job that might introduce an occupational confound. Subjects received job offers from both organizations and were asked to indicate which of the two organizations they found more attractive by accepting one of the offers. Analysis of variance results indicated only weak support for the congruency hypothesis. Differences were observed in nAch between the groups of subjects attracted to each organization. No differences were found for any of the other need strength measures. This suggests that the subjects attracted to the different organizations were substantially similar. Hierarchial factor analysis of the PRF has suggested a six‐factor structure that appears consistent with the second‐order factors from other respectable personality measures. This suggests that the second‐order solution may be a parsimonious mapping of the personality domain and may therefore be more relevant in testing these hypotheses. The analysis was repeated using these dimensions. The results suggest that work force homogeneity may be more complex than originally considered. Implications for the homogeneity hypothesis are discussed, and suggestions for further study of this concept are offered.

Reward Functions of Personnel Training

The intersection between personnel training and reward systems in work organizations has largely been ignored in research on human resource management. This paper attempts to relate the two by shedding light on reward functions that are inherent in training. An empirical classification of individually perceived benefits from participation in training is presented, and organizational implications of the findings are discussed.

Economic Aspects of Clinical Decision Making: New Perspectives

New perspectives on the economic aspects of clinical decision making in the changing health-care environment are discussed. Economic appraisal of health-care delivery offers a mechanism for categorizing choices, assigning priorities, and consolidating disparate aspects of a problem into common measures, such as the ratio of cost to a desired outcome. While past applications of this technique to health care usually considered only one aspect of patient care at a time, the importance of examining the entire process of patient-care activities and the outcome of that process is now recognized. Clinical decision making should transcend traditional boundaries, such as departments, specialty activities, and institutions. The methods of optimizing health-care outcome must be incorporated into the organization's mission, goals, and reward system. Economic evaluations of clinical decision making should incorporate a framework in which choices are related to desired outcomes and beneficial situations. The challenges lie in defining overall measures of health-care provision and developing management information systems reflecting these patient-care objectives and desired outcomes.

Organizational rewards and coalitions in the industrial buying center

This paper focuses on the critical role of coalitions in organizational buying. Organizational buying is frequently a mixed-motive decision scenario in which decisions are actually made by coalitions among the members of the buying center. It is argued that the organization reward and measurement system is a major causal influence on coalition behavior. The results of an experiment are described in which the impact of reward systems which encourage competition, cooperation, and a mixture of both on coalition formation and conflict in the buying center is examined. The results suggest that coalitions are less likely the more the reward system places strong emphasis on cooperation or competition, and more likely when it creates a mixed-motive bargaining situation. Managerial implications are drawn for selling organizations.

Career goals, organizational reward systems and technical updating in engineers

The relationships among engineers' career aspirations, technical obsolescence, personal variables, work characteristics, and perceptions of the organization's reward system were examined in this study. A discriminant function analysis indicated that (a) perceptions of the organization's reward system for management careers and (b) administrative performance were two dimensions that could correctly classify 59·8 per cent of the engineers into one of three career‐orientation groups. Career orientation was unrelated to the amount of technical updating an engineer was currently engaged in; however, individuals aspiring to management careers were engaged in more coursework of a general, broadening nature. Also, the better technical performers most desired future management careers. Career orientations are discussed in terms of age, career stages, and organizational reward system. Changes in organizational reward systems and in work characteristics are suggested because of their consequences for technical personnel.

Occupational stressors for engineers

General organizational sources (macro) as well as job related sources (micro) of stress are considered. For all engineers at different job levels, the macro source contributed more to their stress than the micro sources. Problems with the organizational reward system and time pressure were found to be the top sources of stress. Moreover, the lack of opportunities for development and for the use of abilities to the fullest came next on the list of stressors. The results also shown that the first level supervisors perceived the highest stress level while the third level supervisors expressed the lowest stress level. The implications of these results are discussed.

Ethical Ambivalence and Organizational Reward Systems

Ethical Ambivalence and Organizational Reward Systems

Ethical Ambivalence and Organizational Reward Systems

Ethical ambivalence is a form of sociological ambivalence in which (a) the behaviors, attitudes, and norms that are shaped and maintained by the organizational reward system conflict with (b) the behaviors, attitudes, and norms congruent with the ethical values and judgments of organizational stakeholders. For example, though stakeholders require honest, open reporting, stonewalling and falsification of data may be rewarded. Examples of norms and counternorms are developed, and action strategies for researchers and managers are recommended.

Reward strategies for attracting, evaluating, and retaining professionals

AbstractA typology of the design of organizational reward systems that explicitly addresses attraction, evaluation, and retention of valued professionals is offered within four cultural contexts: the Apathetic Culture, the Caring Culture, the Exacting Culture, and the Integrative Culture. The strategic design of reward systems is one of the most critical but least understood phenomena in corporate America today. The special case of the autonomy‐seeking professional is discussed and implications for strategic reward system change efforts are made.

Strategic Choice and Marketing Managers: An Examination of Business-Level Marketing Objectives

The author examines the choice of strategic marketing thrust for business units in multiproduct firms. In a survey, 86 managers in six firms provided their perception of several product/market and organizational context factors thought to influence strategic choice. The variables which best differentiated among business units with build, hold, or pull back strategies were the attractiveness of the market, the business unit's relative competitive strength, the level of entry barriers, and the organization reward system's relative emphasis on short-run business unit performance.

Organizational reward systems: Implications for climate

This study investigated the role of systematically different organizational reward structures upon individual perceptions of the reward climate. Nurses in a naval hospital worked for the same supervisors but were subject to either tenure-contingent (N=73) or behavior-contingent (N=50) reward systems. No differences in perceived reward climate were found between the two groups. In the tenure-contingent group, job attitudes reflected individual characteristics rather than perceived climate. The opposite relationship was found for the behavior-contingent group.

Job Attitudes among Different Occupational Status Groups

An economic model is applied to employee attitudinal variables as a means of comparing the contribution of intrinsic and extrinsic job facets to overall job statisfaction for two occupational status groups. Surveyed were 577 skilled workers and 181 managers of an electronic manufacturing organization. The two occupational groups were significantly different with respect to the intrinsic-extrinsic composition of overall job satisfaction. Implications for management policy and organizational reward systems are discussed.

Academic stratification and functional theory

This paper examines empirically a set of propositions on organizational stratification drawn from functional theory. The data consist of 38 departments of a large university which are treated as contextual units, as well as the responses of individual faculty to a survey. The findings present an interesting theoretical paradox: (1) functional arguments do not appear adequate to account for differences in income stratification among departments, but (2) they do explain participants' beliefs and judgments about the legitimacy of organizational reward systems. The implications are discussed, and a line of inquiry is suggested that would focus on the problem of establishing legitimacy with the environment(s) as a major source of organizational structure. It is suggested that organizational features act as symbolic devices that inform others that a given organization is a competent member of its set. In short, it is conforming to agreed upon definitions of the appropriate—most “rational”—structure for thattype of organization.

Pay Satisfaction: An Empirical Test of a Discrepancy Model

Lawler's discrepancy model of pay satisfaction was tested to determine its viability as a predictor of pay satisfaction. An analysis of die data seems to indicate that a substantial portion of the model is not supported. Thirteen out of nineteen proposed variables tested were found to have little or no relationships with pay satisfaction. However, social comparison, wage history, status, actual pay, performance and job difficulty were found to have weak to moderately strong relationships with pay satisfaction. Implications for the design of reward systems in organizations are discussed.

Personal values: A basis for work motivational set and work attitude

This paper investigates the interrelationships among the employee's personal value system, job attitude, and organizational reward system. It was assumed that individual values are part of the set with which employees approach their work environment and evaluate the organizational reward system. Two separate and distinct Israeli employment universes were investigated and compared. They were that of industrial workers on the kibbutz and that of persons employed by private sector industries. It was found that workers from the kibbutz industry, where differential financial renumeration does not exist, reported a higher level of self-realization values and more satisfaction with intrinsic job aspects than those employed in the private sector. In contrast, employees in the private sector, who receive differential extrinsic rewards, reported a higher level of both aggrandizement values and extrinsic job satisfaction. In both samples, personal values were found to be related to aspects of job satisfaction.