Crowding-out or crowding-in? Direct voice,performance-related pay,and organizational innovation in European firms

Building on motivation crowding theory (MCT), this article contributes to the human resources management (HRM)-innovation debate by examining the potential trade-offs between HRM practices targeted to increase employees' intrinsic motivation, such as direct employee voice (EV), and the presence of extrinsic incentives in the form of individual and collective performance-related pay (PRP). The results of the analysis on more than 22,000 European establishments show support for the positive relationship between EV and a firm's organizational innovation, and that this relationship is weaker in companies that adopted individual PRP schemes (piece-rate plans). Moreover, while we found that collective PRP (profit-sharing) does not moderate the relationship between EV and organizational innovation, a positive and significant moderation effect emerged when the combined presence of individual and collective PRP was considered. By advocating that the coexistence of multiple forms of PRP could overcome the crowding-out effect of individual PRP on EV, the study contributes to the HRM debate by also calling for a better understanding of the potential contingencies between different HRM practices when innovation is focus of the analysis.     

高管股权激励能推动企业承担社会责任吗？

如何激励高管主动承担企业社会责任一直是学术研究的热点话题。利用中国A股上市公司数据对高管股权激励与企业社会责任间的关系进行实证检验,研究结果表明,高管股权激励能够推动企业承担社会责任,表现为实施股权激励的样本有更高的企业社会责任得分。在年度政策不确定程度更高的样本中,高管股权激励对企业社会责任有更明显的推动作用;在地区市场化程度更高的样本中,高管股权激励对企业社会责任有更明显的抑制作用。作用机制检验表明,高管股权激励主要通过激励风险承担和缓和融资约束两条路径对企业承担社会责任产生积极的影响,表现为在风险回避倾向更高的样本以及融资约束更严重的样本中,股权激励与企业社会责任得分的正相关关系更显著。经济后果检验表明,实施股权激励企业的社会责任得分越高,企业的财务业绩和市场业绩也越好。     

Comparisons of the effects of individual and collective performance-related pay on performance: A review

Debate on whether performance-related pay enhances organizational performance has centred on individual-based systems. This paper reviews studies that compare these with collective-based systems such as team bonuses and profit-sharing. Analysis of such comparisons – both field and experimental studies – reveals that collective systems, either alone or in conjunction with individual systems, are associated with higher performance. In no study do individual incentives outperform collective systems. Tests for moderators were rare but suggest that task interdependency may enhance collective systems' effects. Tests of mediators are also rare but point to enhanced levels of cooperation and idea generation under collective systems. This review examines how the included studies contribute to our understanding of key issues in payment-systems research – the roles of sorting effects and free riding under collective systems, and whether financial incentives may undermine intrinsic motivation – and finds it is limited, suggesting future work should concentrate on these areas.     

Group versus Individual Performance Pay in Relational Employment Contracts when Workers are Envious

I compare group to individual performance pay when workers are envious and performance is nonverifiable. Avoiding payoff inequity, the group reward scheme is optimal as long as the firm faces no credibility problem. The individual reward scheme may, however, become superior albeit introducing the prospect of unequal pay. This is due to two reasons: Group incentives are relatively low‐powered compared to individual incentives, requiring higher incentive pay and impeding credibility of the firm. Moreover, with individual rewards, the firm benefits from the incentive‐strengthening effect of envy, allowing for yet smaller overall incentive pay and further softening the credibility constraint. I also show that contracts combining both individual and group rewards are often optimal, depending on the firm's credibility problem. These contracts include joint and relative performance pay schemes.     

Employee preference for performance-related pay: predictors and consequences for organizational citizenship behaviour in a Japanese firm

Research on performance-related pay (PRP) has largely focused on the outcomes of PRP implementation in a Western context. This paper examines the predictors of employee preference for PRP and the consequences for organizational citizenship behaviour (OCB) in Japan where seniority-based pay and teamwork have long been the norm. The sample consists of 155 sales representatives in a large electric appliance manufacturing company that was transitioning from a seniority-based to a PRP-based compensation system. Overall, respondents indicated a preference for PRP over seniority-based pay. The hierarchical regression results indicate that employee preference for PRP is positively and significantly associated with individual competitiveness and occupational commitment, while being negatively and significantly related to organizational commitment and to the age group of employees who joined the labour market prior to the bursting of the economic bubble in Japan. No significant relationship was observed between PRP preference and OCB in the hierarchical regression analysis, although the two are positively and significantly correlated contrary to our expectations. Implications for international human resource management are discussed.     

Innovative work behaviour and performance-related pay: rewarding the individual or the collective?

In order to change employee behaviour, companies frequently turn to forms of performance-related pay (PRP). At the same time, there is a clear imperative to encourage employee innovation. In this study we focus on the relation between PRP, organizational and job-level task resources and innovative work behaviour (IWB). In doing so, we distinguish between individual and collective PRP and build on insights from high-performance work systems and employee creativity literature. Using survey data of 927 employees from five Belgian industries, we find that individual PRP weakens the important positive relation of task-level job resources like learning opportunities on IWB. The combination of both individual and collective PRP, on the contrary, strengthens the positive relationship between organizational resources like upward communication and IWB.     

Incenting managers toward the triple bottom line: An agency and social norm perspective

Research to date has identified CEO pay structure as an important factor in the environmental and social performance of the organization but has not considered how pay may influence these sustainability efforts at the middle‐management level. We address this void with an experimental manipulation of direct and indirect pay incentives for an environmental sustainability project and production cost savings project. Counter to our predictions, investment in sustainability versus cost savings is significantly lower when incentives for both projects are equivalent, and investment is only comparable when incentives for the sustainability project are superior. Further investigation using qualitative data attributes this to differences in the salient social norms that individuals hold and an apparent undervaluing of the indirect incentive derived through sustainability's contribution to cost savings. The results shed light on primary ways in which human resource management practices may be used to embed support for sustainability initiatives throughout the organization.     

DELEGATED PORTFOLIO MANAGEMENT: A SURVEY OF THE THEORETICAL LITERATURE

Abstract.  This paper provides a selective review of the theoretical literature on delegated portfolio management as a principal–agent relationship. The main focus of the paper is to review the analytical issues raised by the peculiar nature of the delegated portfolio management relationship within the broader class of principal–agent models. In particular, the paper discusses the performance of linear versus nonlinear compensation contracts in a single-period setting, the possible effects of limited liability of portfolio managers, the role of reputational concerns in a multiperiod framework, and the incentives to noise trading. In addition, the paper deals with some general equilibrium dimensions and asset pricing implications of delegated portfolio management. The paper also suggests some directions for future research.     

Changing Behaviour: Successful Environmental Programmes in the Workplace

There is an increasing focus on improving the pro‐environmental attitudes, behaviour and habits of individuals, whether at home, in education, travelling, shopping or in the workplace. This article focuses on the workplace by conducting a multi‐disciplinary literature review of research that has examined the influence of organization‐based behaviour change initiatives. The review includes only research evidence that measured actual environmental performance (e.g. energy use) rather than solely using self‐reported methods (e.g. questionnaires). The authors develop an ‘employee pro‐environmental behaviour’ (e‐PEB) framework, which contains individual, group, organizational and contextual factors that have predictive relevance across different behaviours and organizations. The review shows that the strongest predictors are environmental awareness, performance feedback, financial incentives, environmental infrastructure, management support and training. A key finding from this review is that attitude change is not necessarily a pre‐requisite for behaviour change in the workplace. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Utilization control in HMOs.

Health Maintenance Organizations (HMOs) have emerged as a major vehicle to reduce transaction costs associated with defining the limits of health insurance coverage and to provide appropriate provider incentives. This article explains the heterogeneous set of incentives used by HMOs to reimburse providers and performs empirical tests of their effectiveness. The empirical analyses reveal that utilization of health care services is reduced when (1) physician compensation is based on salary or capitation arrangements rather than some measure of output; (2) bonuses and paybacks are based on individual rather than group performance; and (3) when the HMO operates as a proprietary (for-profit) organization. Utilization is not significantly affected by incentives placed on the hospital. Finally, physician ownership of the HMO was found to lead to higher levels of utilization.     

薪酬战略与薪酬满意度的关系

本文对我国三个地区11家企业287份有效问卷进行统计分析,在控制了基本的个人和组织变量、工资水平后,结果发现基于岗位的薪酬制度能提高薪酬管理、福利两方面的满意度;有奖金的薪酬制度能提高薪酬水平的满意度;高于外部市场平均水平的薪酬制度能提高薪酬管理、福利两方面的满意度;以长期绩效来定奖金的薪酬制度与薪酬满意度不相关;以个体绩效为主要标准确定奖金的薪酬制度能提高四个方面的薪酬满意度。     

Introduction to the Symposium on Tournaments,Contests, and Relative Performance Evaluation

The papers in this symposium reflect several of the directions taken by current research on tournaments, contests and relative performance evaluation. The papers help us understand the implications of agent heterogeneity on the incentives of agents to perform or self‐select the offers designed for them. They encompass various issues such as career concerns and promotion incentives, interim disclosure of information obtained by the principal about agent performance, exposure to risk choices, and competing for talent.     

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.     

THE DETERMINANTS OF RURAL INDUSTRIAL ESTATE PERFORMANCE IN KOREA

Since the 1980s, a total of 221 small- and medium-sized rural industrial estates have been established primarily to induce economic growth into the rural areas in Korea. Despite a growing interest in the performance of the rural industrial estates, it has not been closely examined. The purpose of this paper is to find the plausible factors that have a significant influence on the performance of the rural industrial estates, thereby providing a general understanding of the structural relationship between the estate performance and its determinants. An econometric modeling approach, called LISREL, is used to carry out this evaluation. Of several influential determinants distinguished, seven variables appear to be of substantial significance. They include the urbanization and industrialization of the estate host community, the accessibility of the individual estates to the major cities, the distances from the estates to the large industrial complexes, the local tax rates, and the government loans and incentives. The findings imply that more favorable are the estates constructed within the labor market boundaries of the major cities and adjacent to large industrial complexes. In addition to the location and environmental factors, financial funds and incentives will continue to remain as an influential factor for the success or failure of the estates.     

Promotion Tournaments and Individual Performance Pay

We analyze the optimal combination of promotion tournaments and linear individual performance pay in an employment relationship. An agent's effort is nonobservable and he has private information about his suitability for promotion. Thus, the two incentive schemes need to be combined to serve both incentive and selection purposes. If harder working agents respond less to intensified effort incentives, we find that the principal puts less emphasis on individual performance pay when selection becomes more important. Thus, we provide a possible explanation as to why, in practice, individual performance pay is less prevalent than promotion‐based incentives.     

Can you pay employees to innovate? Evidence from the Canadian private sector

Using 7 years of data representing the Canadian private sector, we estimate the effects of the major components of compensation on a rarely studied form of employee performance: innovation. Although there are some limitations inherent in the data, our results indicate the complex motivation required for consistent innovation success. Surprisingly, we find that fixed pay (salary) and individual performance pay have no effect on innovation, while variable group pay and indirect pay (employee benefits) have a positive effect. In other words, our results suggest that you can pay employees to innovate, provided that you select the right compensation incentives.     

论高校绩效薪酬体制改革对分配公平感的影响

文章将公平相关理论与某高校绩效薪酬体制改革相结合,以高校管理人员为研究对象,通过问卷的设计及对问卷结果的统计和分析,诊断分配不公平产生的原因,并分析影响分配公平感的若干因素。     

Status Incentives and Performance

Studies in economics and management suggest that people invest effort to achieve pure status, and this investment increases in status incentives. We design field experiments to investigate these two behavioral hypotheses. We define status as the subjects' relative rank in their group based on their performance in a task. We explore two real tasks. In both of the tasks, subjects' earnings are nominal and independent of their performance; so status‐seeking preference should be the sole reason for achieving higher ranks. Our results indicate that inducing higher status incentives may not necessarily improve individual performance and may depend upon the task. Copyright © 2012 John Wiley & Sons, Ltd.     

Let the evidence speak again! Financial incentives are more effective than we thought

In this essay, the authors rejoin the debate about financial incentive effectiveness. They (a) briefly review the state of the literature in 1998, (b) highlight new meta‐analytic findings and update conclusions regarding the financial incentives–performance relationship, (c) address the myth that financial incentives erode intrinsic motivation, (d) provide explanations for the presumed failure of financial incentives and (e) offer some concluding thoughts and suggestions for future research.     

上市公司管理层股权激励研究的近期进展

基于坚实的理论基础和丰富的数据支持,有关管理者股权激励问题的研究获得迅速发展。对股权激励问题开展研究不仅有助于更有效合理地设计管理层股权激励契约、缓和委托代理问题,还有利于充分揭示股权激励实施过程中可能产生的负面影响。本文对近年来海外研究上市公司管理层股权激励的进展进行综述,主要包括管理层股权激励的理论基础、股权激励的业绩效应、股权激励对公司盈余管理,以及股东价值和债权人价值的影响等方面的内容,以期为我国加强这方面的研究与实践探索提供参考。