Organizational Antecedents of Pay-for-Performance Systems in Nonprofit Organizations

Abstract

The applicability of pay-for-performance systems (PfP-systems) in nonprofit organizations (NPOs) is discussed controversially both in literature and in practice. Existing theoretical models emphasize the importance of the employee's motivation and output control for the effectiveness of PfP-systems. However, empirical evidence on which factors influence PfP-system's introduction in NPOs is still lacking. Based on an exploratory study of nine Austrian NPOs, this paper develops hypotheses on what organizational factors distinguish NPOs that rely on PfP-systems for managing employees' performance differences from those that use alternative approaches (e.g., job enrichment, NPO-spirit). Findings suggest that decisions on the application of PfP-systems are influenced by five determinants: perceived degree of competitiveness regarding funding and service provision; degree of strategic freedom; clarity of strategic objectives; existence of management instruments; and organizational culture.Résumé L'applicabilité de la rétribution pour la performance (PfP : pay-forperformance) dans le cadre des organisations à but non lucratif (NPO : Non Profit Organisation) fait l'objet d'une discussion controversée à la fois dans les documents et dans la pratique. Des modèles théoriques existants mettent l'accent sur l'importance de la motivation des employés pour l'efficacité des systèmes PfP. Cependant, la preuve empirique sur la nature des facteurs qui influence l'introduction des systèmes PfP dans les NPO fait encore défaut. En se basant sur une étude prospective de neuf NPO autrichiennes, cet article développe des hypothèses sur la nature des facteurs organisationnels qui distinguent les NPO ayant recours aux systèmes PfP pour gérer les différences de performance des employés de celles qui utilisent des approches alternatives. Les conclusions suggèrent que les décisions portant sur l'application des systèmes PfP sont influencés par cinq facteurs déter-minants : le degré perçu de compétitivité concernant le financement et la prestation de services, le degré de liberté stratégique, la clarté des objectifs stratégiques, l'existence d'instruments de gestion et la culture de l'organisation.Zusammenfassung Die Anwendbarkeit von leistungsbezogenen Vergütungs-systemen in Nonprofit-Organisationen wird sowohl in der Literatur als auch in der Praxis kontrovers diskutiert. Theoretische Modelle betonen die Bedeutung der Mitarbeitermotivation und Ausgabesteuerung für effektive leistungsbezogene Vergütungssysteme. Allerdings fehlen noch immer empirische Beweise darüber, welche Faktoren Einfluss auf die Einführung leistungsorientierter Vergütungssys-teme bei den Nonprofit-Organisationen haben. Basierend auf einer Forschungsstudie neun österreichischer Nonprofit-Organisationen stellt dieser Beitrag Hypothesen dazu auf, welche organisatorischen Faktoren die Nonprofit-Organisationen, die bei der Handhabung der unterschiedlichen Mitarbeiterleistungen auf leistungsbezogene Vergütungssysteme bauen, von den Organisationen abheben, die alternative Method...

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