Elements of expectancy, embedded, reinforcement, goal setting, agency and equality theories, for instance do find their way into compensation design. However, if compensation designs consciously employed proven theoretical constructs, could organizations get more out of their compensation plans?
yes, they do. However, other vital factors that help to shape compensation strategy would include legislation, and the organisations' profit level.
I do agree with Justin. As I know, for designing strategy in every field, we use action research (Saunders et al., 2009) and we know it's a kind of participative research to get results. To do this, HR professionals need scientific view to get reliable and valid results.
In addition, you should notice HR Triad (Jackson et al., 2005) and SHRM analytical framework (Schuler et al, 1995). Those give you valid indexes to measure the result after a while.
- The attached paper is useful for analyzing HR stakeholders-.
Thank you for your input and I look forward to reading the journal. At the moment, my focus is theory rather than research alone: expectancy, embedded, goal setting, agency, reinforcement theories.
Theory becomes the basis for designing the strategy. However, in addition, other factors are also considered. Theory, organisational factors, union pressure, stakeholders politics, competitive environment etc. affect the strategy. On the basis of these factors, the organisation prepares a strategy whether to pay more than competitors, or equal to competitors, or less than competitors.
Yes, they do. it is or has to be at the back of their minds. Quite like a medical doctor, while prescribing medicine to his patients is guided both by his knowledge about medical theory, and his experience and judgement in dealing with such situations earlier. For example, in deciding compensation strategy, it is essential to keep in mind what motivates people performing different types of roles; how latest trends in rewards management can be taken cognizance of so as to deliver people's expectation; how Gen Y needs to be compensated so as to keep them engaged, etc.
I do agree with Justin and Javid. I think when we build the compensation strategy, we must consider about the opportunity and prospect (sustainability) of our business. It is difference deciding compensation strategy between new business and old business.
Thanks for the contributions to date and I realize that I am standing at the threshold of where business and academia meet. My reason for the question is, I am conducting a study on this particular topic. I am aware of some of the considerations when management develops compensation strategy: organizational needs, individual difference, labour supply, economic conditions, demographics, legislative requirements and so forth. At this point, as per the research question, I believe the majority of compensation designers lean on the side of implicit use of theory, which makes sense. Dr. Saini made the statement, "it is in the back of our minds..." which sums up some of the thought processes. It will be interesting to see what the data says. Consider this, without checking, If you were to ask yourself to define or explain: expectancy theory, reinforcement theory, job-embedded theory, goal setting theory, equity theory or resource based view...all of which are relevant to organizations today; would one truly know the meaning in the context of compensation. If so or if not, would it provide additional incites into developing strategies, perhaps something not considered or funneled by mainstream thought or organizational practices? Your continual feedback is welcomed as undoubtedly your experience is a few years ahead of mine.
- Badges
- Science topic
- Similar topics
- Psychology
- Organizational Psychology