Between universality and contingency

Abstract

Purpose -The purpose of this study is to examine whether the performance of the compensation system is better explained by the universalist approach or the contingent approach. The paper also attempts to determine the type of fit that yields the most promising gains in terms of perception of performance. Design/methodology/approach -Data were collected by questionnaire from 602 large organizations in three countries (Canada, France, and the UK), and from this, five hypotheses were formulated and tested using moderated regression analysis. Findings -The study shows that having an optimal relationship among compensation policies (intra-activity fit) leads to a more efficient compensation system than that obtained following an alignment with business strategies (vertical strategic fit) and with organizational development strategies (internal organizational fit). However, the results suggest that the universalist perspective cannot be rejected. Practical implications -Human resources managers should exercise prudence regarding the pairing of compensation policies with various organizational characteristics, particularly those related to compensation management policies, because it is the interaction between compensation policies and their management methods that most influences the perception of performance. Of all these management policies, transparency of salary information seems to be central to the contingency perspective. Originality/value -One of the most interesting contributions of this research is the identification of negative alignments that may result in negative performance. The joint application of two compensation policies, which, individually, have a positive influence on performance, can create a negative interaction. Contingency is therefore not always desirable, and prudence is recommended in the types of alignments introduced.

Employment relations and perceived organizational performance: the moderating role of technological intensity

“…On the other hand, Katou and Budhwar (2006) found that the compensation package has a significant influence on both the individual performance of employees in manufacturing industries and the organization's effectiveness and competence. Therefore, in this competitive scenario, companies are exploring compensation strategies that can lead to enhanced performance (Chênevert and Tremblay, 2011). This leads to the following hypothesis:…”

Centralization and Effectiveness of Reward Management in Multinational Enterprises

“…Measuring the effectiveness of reward management based on perceptions rather than on objective measures is the method of choice in this study, as we examined the influence of in-group favoritism, a phenomenon which is driven solely by perceptions and subjective opinions, on the centralization considerations of reward managers. Furthermore, this assessment is applicable to various sectors and countries, while objective effectiveness is not due to the variety of influencing factors in different environments (Chênevert & Tremblay, 2011). However, we have to admit that the small sample size did not allow for a systematic inclusion of many control variables and that larger sample sizes could have led to more explanatory power for the data and, therefore, more significant results.…”

“…Perceived effectiveness of reward management was measured according to Chênevert and Tremblay (2011), albeit with one modification: The term “pay” was exchanged for the term “reward,” since this term is broader and captures benefits and relational returns as well; for example, “ Our reward policies appear to enjoy widespread acceptability among employees .” The response format included a 5-point Likert scale (1 = agree strongly ; 5 = disagree strongly ), and effectiveness scores ranging from 1 to 5 were reversed (5 = maximum perceived effectiveness ; 1 = minimum perceived effectiveness ). This variable was also assessed separately with respect to the three management levels.…”

“…Many scholars support a universalist approach, namely that there is one best way for HRM to lead to higher business success. For example, according to Chênevert and Tremblay (2011), a pay-above-market policy is assumed to improve the performance of compensation systems and – albeit indirectly – business performance. In contrast, contextualist approaches assume that the effectiveness of certain HRM practices depends on their coherence in relation to situation-specific characteristics such as the country-specific context, including local institutional or cultural influences (see also Festing et al, 2007).…”

Pengaruh Kompensasi dan Lingkungan Kerja Non Fisik Terhadap Kinerja Pegawai PT Jamkrindo Kantor Cabang Palembang

“…Hal ini dimaksudkan bahwa sistem pembayaran dan pemberian kompensasi harus sesuai dengan peraturan dan penetapan dari perusahaan dengan seistem penilaian kinerja karyawan untuk menciptakan keadilan dalam pemberian kompensasi pada seluruh karyawannya. Untuk kinerja optimal, sistem kompensasi harus terdiri dari kebijakan yang konsisten baik antara karyawan individu atau sendiri dan dengan kebijakan HRM lainnya (Denis Chênevert, 2011).…”