Group-based pay-for-performance plans and firm performance: The moderating role of empowerment practices

Hyondong Kim (), Kyra Sutton () and Yaping Gong ()

Asia Pacific Journal of Management, 2013, vol. 30, issue 1, 52 pages

Abstract: As the popularity of group-based pay-for-performance plans persists, compensation researchers are exploring the conditions under which these plans contribute to the financial performance of firms. Based on a sample of 1,933 employees from 415 companies in South Korea, we found that group-based pay-for-performance plans enhance both objective and subjective measures of firm performance. Furthermore, consistent with the contingency perspective of fit, we found that empowerment practices positively moderate the relationship between group-based pay-for-performance plans and firm performance. These findings suggest that empowerment can enhance the effectiveness of such pay plans. We discuss implications for research and practice. Copyright Springer Science+Business Media, LLC 2013

Keywords: Group-based pay-for-performance plan; Empowerment practice; Contingency perspective; South Korea (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/s10490-011-9255-7

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