Compensation and organizational performance: theory, research, and practice

Preface

1. Compensation as an Evolving Field: Past, Present, and Future

Origins in Industrial/Organizational Psychology

Practitioner Roots

Job Evaluation and Internal Pay Structures

Criticisms of Traditional Models

Philosophy of This Book

2. Repertoire of Strategic Pay Choices

Criteria Used to Distribute Rewards

Assembling the Compensation Package

Administering the Compensation System

A Holistic Approach to Linking Compensation Choices and Business Strategy

Summary

3. Pay Choices and Organizational Strategies as an Interrelated Set of Decisions

Internally Consistent Pay Strategies

Multilevel Organizational Strategies

Overarching Strategic Compensation Patterns and Corporate Strategy

Overarching Strategic Compensation Patterns and Business Unit Strategies

Theoretical Propositions

Policy Implications and a Research Agenda for the Future

Summary

Appendix 3.1. A Profile of Compensation Strategies Associated with Various Corporate Strategies

Appendix 3.2. A Profile of Compensation Strategies Associated with Various Business Unit Strategies

4. Executive Compensation: Theoretical Foundations

Interdisciplinary Conceptual Roots

Marginal Productivity Theory

Governance Theories

The Behavioral Agency Model

Institutional Theory

Structural Theory

Human Capital Theory

Executive Pay as Symbolism

Pay Dispersion Theory

Self-Selection Theory

Summary

5. Determinants and Consequences of Executive Pay

Role of Executives in Influencing Firm Performance

Why the Evidence on Executive Pay Is So Mixed as We Approach Nine Decades of Research

What We Know So Far about Executive Pay

Summary

6. Policy Choices, Strategic Design of Executive Compensation Programs, and Implementation

Dilemmas Confronting Designers of Executive Pay Packages

Elements of the Executive Compensation Package and Strategic Implications

Summary

7. Risk and Executive Pay

The Concepts of Risk

Theoretical Perspectives of Risk

Compensation and Risk Research

Summary

8. Corporate Social Performance: An Alternative Criteria for the Design of Executive Compensation Programs

Social Criteria as Part of Executive Pay

Corporate Social Performance as an Alternative Approach

Issues in Rewarding Social Responsibility at Top

Summary

9. Measuring Performance at Different Levels of the Organization

The Measurement of Performance: Preliminary Thoughts

Why Organizations Measure Performance

Performance Measurement Issues

The Conflicting Roles of Performance Measures

Performance Measures Specifications

The Choice of Performance Measures

Summary

10. Managing Pay for Performance Systems

Why Performance Contingent Pay May Be Counterproductive

Navigating Treacherous "Pay for Performance" Waters

Rewarding Individual Performance

Rewarding Team Performance

Rewarding Organizational Performance

Efficiency-Based Pay Policies

Profit-Based Pay Policies

Multicriteria-based Pay Policies

Summary

References

Index

About the Authors