Compensation Strategy and Organizational Performance: Evidence From the Banking Industry in an Emerging Economy

Chang, C. Janie; Ou, Chin S.; Wu, Anne

doi:10.1016/s1474-7871(04)12006-6

Cited by 4 publications

(7 citation statements)

References 11 publications

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“…Reward system, as a form of formal control system, accompanies performance measurement standards that have been set in align with the company's goals, thus becoming a necessary path to direct all employee behavior in achieving company's goals. Chang, Ou, & Wu (2004) prove that an effective reward system can have a direct impact on company's performance, especially financial performance. The impact of an effective reward system can be divided into short-term and long-term.…”

Section: Reward System and Sbu Performancementioning

confidence: 98%

The Role of Reward System as Performance Control System: Empirical Evidence from Strategic Business Unit in Indonesia

2022

QAS

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The current global uncertainty in the business environment has delivered negative impact on the Indonesian economy, resulting in problems that arise for large-scale corporate companies that have many Strategic Business Units (SBU) under them. This condition presents a challenge for corporate companies where one of the main roles is to regulate all SBU to be able to produce optimal performance through the established Management Control System (MCS). One of the MCS that need to be studied more deeply academically is reward system that is expected to be able to improve SBU performance through Organizational Learning Culture (OLC) and innovation capability. This study aims to empirically prove the development of a more comprehensive model to improve the SBU performance, especially in SBU context for corporate companies in Indonesia. This is a causal quantitative with total samples is 72 respondents. The results prove that reward system has a significant positive effect on SBU performance, innovation capability, and OLC. OLC has a significant positive effect on innovation capability, but has no significant positive effect on SBU performance. The innovation capability has a significant positive effect on SBU performance. Meanwhile, innovation capability is proven to be a mediating variable for the effect of reward system on SBU performance, and the influence of OLC on SBU performance. OLC is proven to be a mediating variable of the effect of reward system on innovation capability, but it is not proven to be a mediating variable of the effect of reward system on SBU performance.

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Section: Reward System and Sbu Performancementioning

confidence: 98%

The Role of Reward System as Performance Control System: Empirical Evidence from Strategic Business Unit in Indonesia

2022

QAS

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“…Employee relations focus on commitment between the employer and the employee, which explains each party's responsibility to a contract [82][83][84]. Many employers desire committed employees with less compensation, whilst diligent employees are greatly concerned about rewards allocated to their duties [85,86]. High-level performing employees desire satisfactory working conditions, security of employment, safe working environment and opportunity for career advancement [87,88].…”

Section: Employee Relations and Collective Bargainingmentioning

confidence: 99%

“…However, employers cause grievances when they fail to respond to promises made in an employment agreement. Employees' grievances may be justified by tangible evidence, or they may base their assertions on circumstantial evidence, which is difficult to substantiate [80,86,87]. When management notes grievances, they should address them promptly to prevent escalation.…”

Section: Employee Grievance and Disciplinary Proceduresmentioning

confidence: 99%

Untitled

2023

IJEBM

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Organisations are experiencing uncountable challenges in their thrust for competitive excellence. This has made many corporations to embark on human capital development processes to facilitate extensive career development opportunities. Consistency of operations are the critical elements recoded by numerous management practitioners and researchers as determinants of corporations growth. This study assessed management inconsistent attitudes exhibited that precipitate unpleasant actions instituted by employees. In its drive towards constructive compilation of facts, this investigation extracted, reviewed, analysed and adopted relevant facts derived from secondary sources published by many schools of thought.Adoption of relevant contributions disclosed research concerns, which facilitated the collection of primary data with the aid of questionnaires and focus group discussions. A representative sample size of 200 respondents and a sample frame that encompasses three corporate institutions are the considerable elements of this endeavour. This study analysed facts derived from survey with statistical package for social sciences (SPSS). Facts presented indicated that, HRM policies are selectively implemented and rights of many employees are violated. They mentioned that most job classifications do not align with prescribed rules and regulations governing human capital management. Respondents disclosed that numerous promotions are not done in accordance with stipulated regulations; elements such as capacity building, task distribution, grievances reported, are preferentially dealt with, and such act of unpleasantness leads to organisations unrest. In addition, disciplinary hearings, constructive and summary dismissal matters are neither thoroughly investigated nor supported by credible evidences in a disciplinary hearing. Consequently, aforementioned unpleasant characteristics could serve as precursor for industrial actions. This study is noteworthy to management consultancies, corporations in Freetown; and serve as reference mechanisms for numerous related investigations.

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“…Total reward system balances the monetary and non monetary aspects of compensation in the best interest of the employees and the company as highlighted by Armstrong (2006), reward practices that improve motivation, commitment, enhance job engagement and promote discretionary behavior lie at the base of the total reward systems. 10 (2004) argue that, when a productive employee leaves an organization, it leads to loss in productivity, loss of social capital and loss of customers. The departing employee also takes away from the organization the knowledge, skills and network of contacts.…”

Section: Total Reward Approachmentioning

confidence: 99%

“…As an example, uniform allowance, which will result in tax saving of Indian rupees (INR) 3,600 -18,000 per annum ($53USD-$265USD per annum, approximately), depending upon the salary bracket, has been introduced. 10 The periodicity of salary revisions and bonus pay-outs.…”

Section: Delivery Of Rewardsmentioning

confidence: 99%

Strategic rewards - a case based study

Gupta¹,

Sharma²

2016

Studia Mundi – Economica

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Talent has won 'The war for talent'. The war is caused by the continuously increasing demandsupply gap for skilled workforce. Consequently, organizations face difficulty in attracting and retaining talent. Talent market is highly dynamic, since new disciplines of knowledge and skills are continuously emerging due to explosive growth of knowledge. It is resulting in rapidly changing technology and preferences and priorities of workforce in the midst of shortages. This necessitates appropriate reward system but in practice very few organizations offer attractive value proposition to their workforce. Most organizations still adhere to the conventional reward system.The traditional Rewards Management assumes money, and cash components to be the strongest motivator and the best performance incentives for employees. Higher wages/rewards have a close association with efficiency/productivity and employee turnover rates. Neo-classicists postulate equality between wages and the marginal product of labor. Higher-wages help in facing short supply of talent.Neo-classicists argue that the 'Total Factor Productivity (TFP)/Multi-factor Productivity (MFP)' depends on investment in human capital; education and skills are the drivers of productivity of labor. It implies that the companies, especially service providers, which use manpower as the pivot, should particularly invest in human capital.This study also considers rewards as the main driver of high performance; so the companies should focus on satisfying the needs of all the employees by balancing extrinsic and intrinsic values; which is based on strategic reward system. Further, the Rewards Strategy, Business Strategy and external environment should be aligned to ensure sustainable results. Outcomes tend to diverge from desired goals if business and rewards strategy are not well aligned. 'Strategic Rewards System' does not emerge in one go it evolves if the above conditions are satisfied.Therefore, the study traces the historical evolution of 'Strategic Rewards System' by review of literature. This furnishes the rationale for the case study based on a Small Medium Enterprise; it provides evidence for the choice of the "Strategic Rewards System" by the organization under study. The case study assesses the relation of reward strategy with the organizational performance. The study concludes that a well-designed and a well-executed Strategic Rewards System reverses employee turnover and improves performance without a lofty budget.

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Compensation Strategy and Organizational Performance: Evidence From the Banking Industry in an Emerging Economy

Cited by 4 publications

References 11 publications

The Role of Reward System as Performance Control System: Empirical Evidence from Strategic Business Unit in Indonesia

The Role of Reward System as Performance Control System: Empirical Evidence from Strategic Business Unit in Indonesia

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Strategic rewards - a case based study

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