Strategic reward systems: a contingency model of pay system design

Brian Boyd · Alain Salamin

158 citations0/0 files storedStrategic Management Journal

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Human Resource and Talent Management Accounting and Organizational Management Management and Organizational Practices

Abstract

Abstract A limited number of studies have addressed the idea of ‘strategic’ reward systems—the matching of compensation systems to a firm's strategy. Prior research on this topic has been confined to U.S. firms, however, and a number of key questions remain unanswered. Using a sample of 917 employees from two large Swiss financial institutions, we found that pay systems are linked with divisional strategic orientation, but in a different form than prior studies. Additionally, we identify hierarchical position as an important variable in the tailoring of reward systems. Hierarchy has a significant main effect on pay plan design, and an interactive effect with strategic orientation. Copyright © 2001 John Wiley & Sons, Ltd.

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