Strategic reward systems: a contingency model of pay system design
Version of Record online: 12 JUL 2001
Copyright © 2001 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 22, Issue 8, pages 777–792, August 2001
How to Cite
Boyd, B. K. and Salamin, A. (2001), Strategic reward systems: a contingency model of pay system design. Strat. Mgmt. J., 22: 777–792. doi: 10.1002/smj.170
- Issue online: 12 JUL 2001
- Version of Record online: 12 JUL 2001
- Manuscript Revised: 6 DEC 2000
- Manuscript Received: 23 MAR 1998
- contingency theory;
- managerial discretion;
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.