Bikes versus lease cars: the adoption,design and use of cafeteria systems in the Netherlands

In the 1990s, Dutch employers started adopting individualized pay systems, commonly called ‘cafeteria systems’. Reports on their use by employers and employees suggest a bewildering variety in their adoption, design and use (by employees). This paper presents an analytical framework to analyse this variety. We distinguish as the main explanatory factor whether there has been voluntary or coerced adoption. The latter refers to introduction as part of sectoral collective labour agreements. Different adoption drivers are argued to have consequences for the design and employee use of cafeteria systems.     

Strategic human resource management (SHRM) in Europe after 1992

Comparative studies of Women’s labour market position usually focus on patterns of gender segregation, considered to be the foundation of gender discrimination. Few studies trace the link between gender segregation and gender pay differences in a comparative context, and even fewer seek to identify links between payment structures and practices and the extent and form of gender pay inequality. Yet although the degree and form of gender segregation clearly vary between countries, there is even more likelihood that differences in pay structures and practices will result in differences in gender outcomes. This study explores the gender pay implications of payment structures and payment systems in three European countries, the UK, Italy and Germany. Payment systems are found to be embedded within country-specific employment systems and result in different levels and forms of gender pay equality. They also present different obstacles to the closure of the gender earnings gap. Moreover, the trends within the general wage determination system rather than specific gender pay equity policies are found to have most impact on women’s relative pay position.     

The role of pay secrecy policies and employee secrecy preferences in shaping job attitudes

Although pay secrecy continues to garner attention in human resource management, little research examines how these policies impact employees. Research inconsistently links secretive pay policies to unfavourable outcomes but has yet to consider that employees may have varying attitudes toward these policies. We examine how employee preferences modify the effect that organisational pay secrecy policies have on employee attitudes in a sample of 431 employed adults. To accomplish this goal, we create measures of pay secrecy policies and pay secrecy preferences that each differentiate two facets of pay secrecy: distributive pay non‐disclosure and communication restriction. Polynomial and moderated regression analyses indicated that disparities between employee preferences and organisational pay secrecy policies can reduce job satisfaction and perceptions of informational, interpersonal, and procedural justice under certain circumstances. These results simultaneously highlight the importance of employee attitudes toward pay secrecy policies and the challenges human resource practitioners face in managing employees with diverse preferences.     

Why is group-based pay perceived as meaningful,meaningless or negative? Exploring the meanings of pay suggested by reflection theory

This study explored the propositions of the reflection theory of pay [Thierry (2001), Work Motivation in the Context of a Globalizing Economy, Mahwah, NJ: Lawrence Erlbaum Associates, pp. 149–166]. The theory is grounded in theories of individual motivation. However, in a group-based pay context more socially oriented motivational factors may also play a role. In addition, the theory does not take into account that pay may have negative meanings. In this study, we have adopted a qualitative approach to improve the understanding of what meanings group-based pay may have. The research questions were the following: (1) why is group-based result-oriented pay perceived as meaningful, (2) why is group-based result-oriented pay perceived as meaningless and (3) why is group-based result-oriented pay perceived to have a negative meaning. To study the meanings attached to group-based pay, we conducted 29 focus group interviews (88 employees) in six municipal organizations in Finland. The results showed that the reasons for perceiving group-based pay as meaningful were related to the value of money, compensation for performance, the positive messages signalled by the pay and positive outcomes. On the other hand, when pay was perceived as meaningless, the arguments were related to the weak instrumentality of money, weak links between performance and pay, incompatibility and lack of knowledge. The negative meanings were related to negative message conveyed by the pay and its outcomes. When these results were compared with four meanings proposed by reflection theory, all four categories were found in the speech of the interviewees. In addition, two new categories were found and designated as ‘messages’ and ‘outcomes’. These new categories were theoretically linked to social identity theory.     

Disability status,individual variable pay,and pay satisfaction: Does relational and institutional trust make a difference?

Although prior research suggests that disabled employees have different needs in the context of some HRM practices, we know little about their reactions to reward systems. We address this gap in the literature by testing a model using the 2011 British Workplace Employee Relations Survey (disabled employees, n = 1,251; nondisabled employees, n = 9,959; workplaces, n = 1,806) and find that disabled employees report lower levels of pay satisfaction than nondisabled employees, and when compensated based on individual performance, the difference in pay satisfaction is larger. We suggest that relational (derived from trust in management) and institutional (derived from firm‐wide policies and HRM practices, both intended to provide equitable treatment to disabled employees) forms of trust play important roles. The results of multilevel analyses show that when trust in management is high, the difference in pay satisfaction under variable pay is reduced. We find just the opposite for employees who work in organizations with a formal disability policy but without supportive HRM practices; the gap in pay satisfaction is exacerbated. However, the combination of the presence of a firm‐wide policy and HRM practices reduced the difference in pay satisfaction. Implications of the findings for theory, future research, and management practice are discussed.     

The impacts of benefit plans on employee turnover: a firm-level analysis approach on Taiwanese manufacturing industry

Employee turnover is a serious problem and the question of how to retain highly talented and valued people is very important. Previous employee turnover studies were mostly focused on the individual level but rarely from the standpoint of the business or firm. This study examines the impacts of four kinds of benefit plans on firm-level employee turnover issues, namely, retirement fund, pension, severance pay and fringe benefit. The present study uses the Census Bureau Employment Movement Survey of the Directorate General of Budget, Accounting and Statistics in Taiwan. The two models used to examine the overall manufacturing industry were: (1) the inducement model which tests the ‘with or without’ effect; and (2) the investment model which tests the ‘the more the better’ effect. Results reveal that, with respect to the firm's employee turnover rate, retirement fund and fringe benefits are negative while severance plans are significantly positive. These results are consistent with the transaction costs theory that total expenditure on these plans to retain employees (bureaucratic cost) is less than the market arrangements (transaction cost). In addition, the impact of pension plans is negative in respect of employee turnover in larger or more highly educated firms, but positive in firms with a lower educational level. Moreover, the firm size is negative while the firm's average employees' educational level is positive with respect to the workforce leaving their jobs. These results are consistent with the perspective of resource-based theory and human capital theory. Incidentally, this study also reveals insignificant differences between the ‘with or without’ effect and the ‘the more the better’ effect existing as a sub-group industry rather than across the entire industry.     

Evaluating Form and Functionality of Pay‐for‐Performance Plans: The Relative Incentive and Sorting Effects of Merit Pay,Bonuses, and Long‐Term Incentives

Using two‐year longitudinal data from a large sample of US employees from a service‐related organization, the present study investigates the relative effects of three forms of pay‐for‐performance (PFP) plans on employees’ job performance (incentive effects) and voluntary turnover (sorting effects). The study differentiates between three forms of pay: merit pay, individual‐based bonuses, and long‐term incentives. By definition, these PFP plans have different structural elements that distinguish them from each other (i.e., pay plan form) and different characteristics (functionality), such as the degree to which pay and performance are linked and the size of the rewards, which can vary both within and across plan types. Our results provide evidence that merit raises have larger incentive and sorting effects than bonuses and long‐term incentives in multi‐PFP plan environments where the three PFP plans are operating simultaneously. Only merit pay has both incentive and sorting effects among the three PFP plans. The implications for the PFP‐related theory, as well as for the design and implementation of PFP plans, are discussed. © 2015 Wiley Periodicals, Inc.     

Pulling in different directions? Exploring the relationship between vertical pay dispersion and high‐performance work systems

Vertical pay dispersion (VPD), a hierarchical pay structure used to motivate employees, has traditionally been studied separately from high‐performance work systems (HPWSs). As a component of HPWSs, incentive‐based compensation schemes focus on employee‐ or team‐level incentives. However, the influence of the simultaneous utilization of VPD and HPWS on performance remains understudied. This study addresses the question of whether these approaches to managing human capital serve as complements or substitutes to one another. VPD and HPWS are argued to substitute for one another with respect to motivation‐ and skill‐enhancing practices. The opposite notion is true in regard to opportunity‐enhancing HPWSs, which serve to amplify the effectiveness of VPD. In a multisource, longitudinal sample of South Korean firms, the hypothesized predictions are supported.     

What motivates employees? A comparison of US and Chinese responses

Differences in culture, history, economy, and political and management systems may lead to differences in employee job attribute preferences across countries. To the extent that this is true, managers and designers of motivation systems must understand the preferences of local employees. This study provides information on the job attribute preferences of Chinese employees at a major international hotel in Shanghai. Employee preference data were compared to published results from other nations. The pattern of preferences in China was unique compared to Russia, Taiwan and the United States. Chinese employees felt that good wages were most important, followed by good working conditions and personal loyalty from the boss and organization. Interesting work was relatively unimportant, especially to older employees, and 'being in on things' was not at all important. Supervisors at the hotel also provided information on the preferences which they believed characterized their subordinates. Unlike US managers who often badly misperceive the preferences of their US subordinates, Chinese supervisors accurately reported their subordinates' preferences. Expatriates in the hotel were much less accurate in ranking local subordinate preferences. Implications for motivating and managing Chinese employees are discussed.     

Social and economic exchange relationships and performance contingency: differential effects of variable pay and base pay

Abstract

In this study, we tested hypotheses derived from social exchange theory by investigating the relationships between employees’ base and variable pay and their social and economic exchange relationships with their employer. In a cross-lagged study of approximately 30 months duration including 488 respondents, the amount of accumulated base pay was positively related to a social exchange relationship, whereas the accumulated amount of variable pay was positively related to an economic exchange relationship. We discuss the theoretical and practical implications of these findings and propose future research on the relationship between pay and social and economic exchange relationships.     

The management of variable pay in European banking

Banking is a major employer in most large European countries, facing common pressures in terms of competition and technological change. Traditional pay systems have been revised in response to changing business objectives and new forms of work organisation. This paper examines variable pay schemes (VPS) in banking in four countries with very different institutional contexts: Austria, Norway, Spain, and the UK. It finds extensive use of VPS in each case and shared managerial objectives in terms of performance management and cost control. Forms of VPS vary, with Norwegian banks in particular favouring collective forms of bonus, but overall there is a common drive towards individual (merit) pay and multiple bonus arrangements providing increased scope for management discretion. In broad terms, what the case of pay-setting in banking suggests is a course of fading path dependency at national level.     

Line managers’ AMO to manage employees’ performance: the route to effective and satisfying performance management

Abstract

Performance management systems are used to increase employees’ performance with the ultimate aim of increasing organizational performance. Organizations rely on line managers to implement performance management systems and to engage in a continuous process of goal-setting, feedback, coaching and performance appraisal with their employees. Drawing on the AMO theory, we predict that the effectiveness of performance management implementation will be a function of three factors. First, line managers should have the Ability to enact the activities that are involved in performance management. Secondly, they should be Motivated to perform these activities. Thirdly, line managers should have sufficient Opportunity to fulfill these activities on top of the demands from other organizational. If not, they could experience role conflict. We developed several cross-level hypotheses. The data came from 71 line managers and 318 employees working in Flemish education. Hierarchical linear modelling found that line managers’ AMO to implement performance management systems was positively related to employees’ satisfaction with the system. These relationships were mediated by employees’ perceptions that the performance management system is strong. A strong system signals that its features are salient across employees and that the system is clear and understood. This study has several theoretical and practical implications.     

Incentives to move up: Effects of pay gaps between levels on employee performance

Employees of a certain rank are motivated by the pay gap between them and the levels above (upward comparison), and the pay gap between them and the levels below (downward comparison). In some cases, employees face multiple upward comparisons such as immediate and subsequent upward comparisons. We hypothesise that upward comparison matters more than downward comparison, and in the case of multiple upward comparisons, the immediate one matters more than the subsequent ones. We also hypothesise that the pay gap effect resulting from the upward/downward comparison ought to be non‐linear in that performance increases with pay gap size at a decreasing rate. The results from two empirical studies, namely, a longitudinal field study and a laboratory experiment, largely support our hypotheses.     

An investigation on the attitudes of Chinese workers towards individually based performance-related reward systems

The study investigated the attitudes of Chinese workers towards individually based performance-related reward systems (IBPRRS). Participants were 106 white-collar workers employed in a Chinese new state-owned enterprise. In line with hypotheses, attitudes towards equality and equity-based rewarding were negatively and positively related, respectively, with attitudes towards IBPRRS. Also in line with expectations, both concern for loosing face (‘Mianzi’) and the belief that performance evaluations are affected by interpersonal relationships (‘Guanxi’) were negatively related to the attitude towards IBPRRS. However, in contrast to hypotheses, participants reported a more positive attitude towards equity than towards equality-based rewarding. Furthermore, in sharp contrast to the relevant hypothesis, the attitude of participants towards IBPRRS was positive. Ad hoc interviews with middle managers corroborated these findings and, furthermore, suggested that Guanxi and Mianzi were indeed impacting evaluations of performance, especially where there was an absence of objective performance criteria. The implication of the study is that although the views of Chinese employees towards IBPRRS are in principle positive, the cultural characteristics of China, and in particular Guanxi and Mianzi, must be taken into account for the successful design and functioning of such systems in the Chinese organizational context.     

Understanding employee preferences for investing in employer stock: evidence from France

In this article, we broaden the focus of existing research on employee stock purchase plans by analysing employee preferences for investing in employer stock as a construct distinct from actual investment behaviour. In our analysis of original survey data in a sample of 900 employees in four French companies, we find that employee preferences are influenced by two common cognitive heuristics (representativeness and familiarity), organisational commitment, the perceived quality of corporate communications about these plans and perceived managerial commitment to employee ownership. We did not find, however, that risk aversion, turnover intentions or perceived employee involvement in decision making influenced preferences for investing in employer stock. Our findings have both theoretical and practical implications for understanding and operating these types of employee benefit plans, which are becoming more common across the globe.     

对企业薪酬制度公开与保密的比较性分析

应用薪酬能够激励员工,也能影响员工的工作积极性,薪酬的公平透明是员工非常关心的问题,企业要发挥薪酬的激励作用。必须要有一个公平合理的薪酬制度,薪酬的作用重在制度公平而不在于保密与否,合理、公平的薪酬制度能够提高员工的满意度,吸引优秀员工,使企业得到可持续的发展。     

Tournament Compensation Systems,Employee Heterogeneity,and Firm Performance

Tournament compensation systems are widely used in practice and have been extensively analyzed theoretically. However, one major problem has hardly been studied in a company context so far: Although it is theoretically well understood that tournament compensation systems are only effective when employees are homogeneous, it has rarely been analyzed what companies can do when they are confronted with employee heterogeneity. In our article, we derive hypotheses on the performance effects of tournament compensation systems in a context of employee heterogeneity based on tournament and expectancy theory. Using personnel records from incentive travel contests, we are able to show that performance is lower in a situation with employee heterogeneity, but that in heterogeneous tournaments, incentives may still work for a subgroup of employees whom we term the “threshold group.” In addition, we also show how companies manage to design the information disclosure systems necessary to install effective “handicapping” or “league‐building” systems in order to increase the effort‐performance expectancy.     

Variation in the average leadership behaviour of managers across countries: Finnish expatriates’ experiences from Germany,Sweden, France and Great Britain

This paper presents the experiences of Finnish expatriates (n=36) from four European countries representing proposed cultural clusters in Western Europe. The focus is on variation in manager–subordinate interaction, i.e. on leadership behaviours of managers across countries. Based on cultural theory and existing comparative research, the national origin of managers is expected to influence their leadership behaviour. By reviewing various earlier comparative studies, working hypotheses are formed about expected variation across countries. The results indicate that variation could be identified in the average styles of managers across countries, although in most cases differences also emerged between expatriates’ reports. This variation in expatriates’ experiences indicates that variation within countries should also be kept in mind when discussing variation across countries. However, it was regarded as possible to form a model of typical characteristics of leadership styles of managers across countries from the perspective of Finnish expatriates based on the identified variation. The implications of variation identified across countries for expatriates and multinational companies are also discussed.     

Influence of high performance work systems on employee subjective well-being and job burnout: empirical evidence from the Chinese healthcare sector

Over the last two decades, high performance work systems (HPWSs) research has been dominated by examining the effects of these systems on firm performance. Research on the impact of HPWSs on employees has been marginalised. This study examines the impact of HPWSs on two psychological outcomes for employees, namely, subjective well-being (SWB) and workplace burnout, by utilising data collected from 1488 physicians and nurses in 25 Chinese hospitals. It also examines the moderating effects of employees' organisational based self-esteem (OBSE), as an individual intervention and physician–nurse relationships, as an organisational intervention, on the relationship between HPWSs and employee outcomes. HPWS is found to increase employees' SWB and decrease burnout. Such well-being-enhancing and burnout-relieving effects are stronger when employees have high OBSE. The positive effect of HPWS on SWB is also stronger when there is a collaborative relationship among employees in an organisation. The major contribution of this study is to unpack the ‘black box’ of how HPWS influences employee well-being in the Chinese healthcare sector context.     

A Cross‐National Study of Fairness in Asia: How Perceptions of a Lack‐of‐Group Bias and Transparency in the Performance Evaluation System Relate to Job Satisfaction

This study explored how managers’ fairness perceptions of performance evaluation systems differ across countries and relate to their job satisfaction. Lack‐of‐group bias and transparency were the constructs used to assess fairness perceptions. The data sample consisted of 903 Asian managers from the subsidiaries of a leading multinational corporation (MNC) strategically expanding its retail markets in Japan, China, Hong Kong, Malaysia, and Thailand. Results showed that the fairness perceptions of lack‐of‐group bias and transparency concerning the common performance evaluation system varied within these Asian countries. Furthermore, those fairness perceptions were significantly related to job satisfaction among Asian managers overall, as well as in each of the five geographical subgroups with the exception of Hong Kong, where the perception of a lack‐of‐group bias was only marginally related to job satisfaction. These findings offer theoretical implications regarding organizational justice, cross‐national management, and performance evaluation, as well as practical implications for leveraging organizational justice perceptions of performance evaluation systems for the effectiveness of MNCs. © 2015 Wiley Periodicals, Inc.