6 Pay and Performance: Individuals,Groups, and Executives

Abstract

In this chapter, we address three pay for performance (PFP) questions. First, what are the conceptual mechanisms by which PFP influences performance? Second, what programs do organizations use to implement PFP and what is the empirical evidence on their effectiveness? Third, what perils and pitfalls arise on the way from PFP theory to its execution in organizations? We address these questions in general terms, but also highlight unique issues that arise in PFP for teams and for executives. We highlight the fact that research and practice in the area of PFP requires one to deal with a number of trade‐offs. For example, strengthening PFP links can generate powerful motivation effects, but sometimes these are in unintended and unanticipated directions, resulting in undesirable effects. In addition, there are also trade‐offs in deciding the degree of emphasis to give to individual versus team performance and to results versus behaviors in PFP plans. What all this means is that, as in other areas of management, “one best way” advice (e.g., do or do not use individual PFP plans) or “sound‐bite” conclusions (e.g., PFP does not exist; PFP does or does not motivate) are rarely valid, but rather depend on the circumstances and the organization. In the realm of executive pay, we question the current conventional wisdom in the management literature that there is little or no PFP. We close the chapter with a discussion of our key conclusions and suggestions for what we think would be the most interesting and useful future research areas. We encourage the management literature, which has increasingly become interested in the concept of evidence‐based management, to execute this concept more effectively in its research and when talking or writing about pay.     

Stress,Task, and Relationship Orientations of Dutch: Do Age,Gender, Education,and Government Work Experience Make a Difference?

Working people are often socialized differently based on their age, gender, education, and work experience in the public versus the private sector. To explore the stress, task, and relationship orientations of people in the culture of the Netherlands, this study focused on the differences of 208 Dutch respondents based on the demographic variables. It appears that they have dissimilar scores on the relationship and task orientations. Age, government work experience and education do appear to be a significant factor in their leadership orientation. Also, males seem to be less task-oriented and less relationship-oriented than their female counterparts. Overall, the Dutch respondents reported a moderate level of stress with no gender differences.     

Stress,Task, and Relationship Orientations of Vietnamese Working Adults: Do Age,Gender, and Government Work Experience Make a Difference?

Adult people are always structured diversely based on their gender, age, and work experience in the government versus private enterprises. To investigate the task, relationship and stress orientations of Vietnamese adults, this research examined 294 Vietnamese people living in three main cities in Vietnam including Hanoi (the capital) in the north, Vinh in the middle and Ho Chi Minh in the south. It found that they have different mean scores on task and relationship orientations. Gender, age and government work experience seem to be essential factors in leadership orientation and overload stress perception. Additionally, older people appear to be more task-oriented than their younger counterparts. In summary, the Vietnamese respondents confirmed a moderate stress perception regardless of age, gender and government work experience.

     

Directors’ human capital,firm strategy,and firm performance

Ideally, corporations are directed by boards whose directors provide valuable human capital that match the firms’ strategy. We investigate how directors’ human capital (international experience, industrial know-how, CEO experience, and financial know-how) affects firm performance including the firm’s strategy (diversification and internationalization) and how human capital is related to acquisition strategies (non-diversifying and international acquisitions). Our sample consists of 560 firm-year observations in Switzerland. We find empirical evidence that directors’ human capital affects firm performance and that this relationship depends on the firm’s strategy. Furthermore, human capital is also correlated with acquisition strategy. The study shows that focusing on board independence and compliance issues may be unrewarding in board research and practice.     

Exploring work- and organization-based resources as moderators between work–family conflict,well-being,and job attitudes

Abstract

In modern Western life it is difficult to avoid work–family conflict. Therefore the resources that might reduce its negative outcomes on well-being and job attitudes come into focus. Our study contributes to the work–family conflict literature by exploring the indirect (moderator) and direct role of three work- and organization-related resources, i.e., job control, family supportive climate, organization-based self-esteem (OBSE), in the work-to-family conflict and well-being/job attitude relationship. Theoretically, the study tested the recently developed Job Demands–Resources (JD-R) model in the Scandinavian context. Data for the study were gathered from three differing Finnish organizations (health care district, ICT company, Cardboard mill; n=1252). In line with the predictions of the JD-R model, job demands (time- and strain-based work-to-family conflict) were more robustly associated with strain-based outcomes (physical symptoms), whereas job resources (job control, family supportive climate, OBSE) were more strongly linked to motivational-based outcomes (job satisfaction, organizational commitment). Both job control and family supportive climate moderated the relationships studied; high job control and family supportive climate buffered against the aversive effects of work-to-family conflict on well-being and job attitudes. These indirect effects also varied in relation to the independent, moderator, and dependent variables. However, OBSE did not operate as a buffering factor, although it showed significant direct effects. From a practical viewpoint, our findings suggest that job control and family supportive climate are resources that help employees to reduce the negative effects related to work–family conflict.     

In—Credible Government: Legitimacy, Democracy, and Non-Governmental Organizations

This article analyses emerging trans-global networks of governance that are coming to light within a post-democratic form of governance that relies upon specific technologies of credibility building, as opposed to universalistic mechanisms of representation. Using the NGO sector as a model, and using examples from fieldwork conducted in the unraveled contexts of Bosnia and Croatia, and the unraveling context of Ecuador over the past decade, we show how intervention within the global south and post conflict realms, although often couched using such master terms as democracy, development and freedom, are in fact geared towards the generation of political legitimacy and influence through relationships based upon the exchange of credibility.

Challenges Facing Public Sector Management in an Era of Downsizing,Devolution, Dispersion and Empowerment—and Accountability?

Agencies at all levels of government are facing strong ideological pressures to downsize, devolve, dispense, and empower both employees and recipients of services. These ideological pressures provide many performance advantages, but collectively they threaten historic notions of achieving economy, efficiency, and effectiveness, along with accountability. It has been widely assumed in recent years that advancements in information technology and performance measurement provide adequate replacements for the historic notion that accountability flows up-the-hierarchy to elected officials and the sovereignty. These technologies, however, are not yet able to ensure responsible administration or accountability in many areas of domestic government services. Today's public managers can play leading roles in developing alternative approaches for achieving accountability if they are supported by forward-looking human resources management (HRM) agencies.     

CEO political liberalism,stakeholders, and firms’ support for LGBT employees

We argue that CEO political liberalism, or the extent to which CEOs are more liberal rather than conservative, affects firms’ support for LGBT employees. Specifically, compared to conservative CEOs, liberal CEOs will be more likely to support LGBT employees by implementing LGBT-friendly policies. We furthermore posit that the presence of certain internal and external stakeholders—including boards, top management teams, and employees, as well as transient institutional investors and LGBT advocacy organizations—alter the proposed effect. Results based on a sample of Fortune 500 firms support our arguments. Our findings contribute to the literatures on leadership, stakeholders, and workplace diversity.     

Banks and Discrimination: How Far Can We Go with Competition? A Reply to Block,Snow, and Stringham

This article discusses competition theory and how advancements from the fields of economics, cognitive science, decision sciences, and management urge us to stop using the same recipe for all different kinds of illnesses. The issue of discrimination in the banking industry offers an interesting platform for this argument, which is developed as an antithesis to what Block, Snow, and Stringham (2008) proposed in their article published in a recent issue of the Business and Society Review. Foundational concepts for a behavioral model of discrimination are presented.     

Fast and Furious or Slow and Cautious? The Joint Impact of Age at Internationalization,Speed, and Risk Diversity on the Survival of Exporting Firms

This article examines the effect of age at internationalization and pace of internationalization on the survival of small and medium-sized enterprises. Two sets of hypotheses are developed on the basis of the sequential expansion and international new venture approaches. These hypotheses are tested using an event-history method and panel data on French SMEs that exported for the first time between 2003 and 2012 (547 firm-year observations). The results show that the failure rate for firms adopting the late, slow, and cautious sequential expansion approach is significantly lower than in small firms adopting other paths to internationalization.