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.     

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.

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.

     

Academic Autonomy and Freedom under Pressure: Severely Limited,or Alive and Kicking?

Academic freedom and the autonomy of academic institutions (their freedom from outside interference) are core values in contemporary academic life. This article outlines changes that have taken place in the last few decades that impact academic freedom and autonomy to at least some degree. These include the increasing catering by universities to stake-holders in the environment, increasing professionalization of university administrations, an evolving pattern of broadening authority over internal university decision-making, and an increasing attention to student (i.e. customer) needs. Two case studies -- one of recent decisions in the University of California system and the other at the University of Oslo -- illustrate the theoretical points in the article and point to the need to know a lot more about academic autonomy and academic freedom, especially in an environment of changing management practices and scarce resource bases for many institutions. The cases were selected because of the authors’ familiarity with them and are examples meant to illuminate some of the challenges and complexities inherent in the phenomena and to inspire further research on academic freedom and autonomy utilizing the instrumental and institutional perspectives from organization theory that are the core of our theoretical analysis.     

‘Clock-watching and box-ticking’: British local authority planners,professionalism and performance targets

The speed of the statutory planning system has concerned UK Governments for decades. The Labour Government of 1997–2010 placed particular emphasis on increasing the efficiency of public services through performance targets. Whilst the subsequent Coalition Government of 2010–2015 removed many targets, those measuring the speed of planning application processing were kept. These performance targets have important potential implications in terms of the autonomy and space for discretionary judgement traditionally seen as intrinsic to the professional nature of planning. Empirical material exploring how British local authority planners responded to these targets suggests they have both restricted and empowered professionals and, whilst changes to practice have occurred, professional identities have remained more resilient. This contradictory picture highlights the importance of considering the role of frontline professionals in implementing reforms.     

Charismatic,ideological, and pragmatic leaders: An examination of leader–leader interactions

Although a number of researchers have examined and demonstrated the unique relationships different types of leaders develop with their followers (Dansereau, F., Graen, G.B., & Haga, W.J. (1975). A vertical dyad linkage approach to leadership within formal organizations: A longitudinal investigation of the role making process. Organizational Behavior and Human Performance, 13, 46–78.; Dienesh & Liden, 1986; Mumford, 2006), relatively little is known regarding how outstanding leaders interact or work together (Hunter, Bedell-Avers, Mumford, 2009-this issue). Given the particular importance of such questions, especially when considering leaders who have the potential to influence national and worldwide developments, the intent of the present study was to examine the leader–leader exchange relationships of charismatic, ideological, and pragmatic leaders. Due to the difficulty associated with examining high-level leader–leader exchanges, a hybrid qualitative–quantitative approach was taken to assess the interactions of Frederick Douglas, W.E.B. Dubois, and Booker T. Washington – three high-level leaders who responded to the same crisis, in the same time period, in the same region of the world. The results provide preliminary evidence regarding the interactions of charismatic, ideological, and pragmatic leaders; in fact, they indicate that leaders interact in a manner consistent with their mental model.     

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.     

Working mothers’ emotional exhaustion from work and care: The role of core self-evaluations,mental health,and control

This research examined the direct and indirect relationships between core self-evaluations (via mental health) and emotional exhaustion originating from both the work and caregiving domains. The extent to which these relationships were moderated by control over work and care also was examined. Data came from 142 employed mothers in Australia who completed surveys at three measurement points each separated by four weeks. Results showed that core self-evaluations related positively to mental health which, in turn, related negatively to emotional exhaustion originating from work, but only when work control was high. Moreover, core self-evaluations related negatively to emotional exhaustion originating from care through improvements in mental health, but care control did not moderate this relationship. Overall, these findings contribute to a better understanding of how working mothers’ personal and work resources mitigate emotional exhaustion.     

10 Sociomateriality: Challenging the Separation of Technology,Work and Organization

Abstract

We begin by juxtaposing the pervasive presence of technology in organizational work with its absence from the organization studies literature. Our analysis of four leading journals in the field confirms that over 95% of the articles published in top management research outlets do not take into account the role of technology in organizational life. We then examine the research that has been done on technology, and categorize this literature into two research streams according to their view of technology: discrete entities or mutually dependent ensembles. For each stream, we discuss three existing reviews spanning the last three decades of scholarship to highlight that while there have been many studies and approaches to studying organizational interactions and implications of technology, empirical research has produced mixed and often‐conflicting results. Going forward, we suggest that further work is needed to theorize the fusion of technology and work in organizations, and that additional perspectives are needed to add to the palette of concepts in use. To this end, we identify a promising emerging genre of research that we refer to under the umbrella term: sociomateriality. Research framed according to the tenets of a sociomaterial approach challenges the deeply taken‐for‐granted assumption that technology, work, and organizations should be conceptualized separately, and advances the view that there is an inherent inseparability between the technical and the social. We discuss the intellectual motivation for proposing a sociomaterial research approach and point to some common themes evident in recent studies. We conclude by suggesting that a reconsideration of conventional views of technology may help us more effectively study and understand the multiple, emergent, and dynamic sociomaterial configurations that constitute contemporary organizational practices.     

Product Modularity,Process Modularity,and New Product Introduction Performance: Does Complexity Matter?

Modularity has the potential to impact various facets of new product introduction performance including product development lead time, frequency of new product introduction, on time introduction and product innovation. The impact of modularity on new product introduction performance, however, may vary for different levels of product and process complexity. This study empirically investigates relationships between perceptual measures of product modularity, process modularity, and new product introduction performance and explores whether an objective product/process complexity measure moderates these relationships. Using survey‐based methodology we probe both manufacturers of technically simple products and technically complex products. Hierarchical regression models are used to test hypotheses concerning the main effects of product and process modularity and the effects of their interactions with complexity on new product introduction performance. The results show that the main effect of product modularity was positive and its interaction with complexity was disordinal and negative, suggesting that the positive effect of product modularity on new product introduction performance is dampened when complexity is high. For process modularity, only the interaction effect (positive) was statistically significant and it was also disordinal in nature. Thus, the effect of process modularity on new product introduction performance is heightened when complexity is high. The implications of these findings are discussed and more specific theoretical and managerial implications are delineated by examining the impacts of these main and interaction effects on individual measures of new product introduction performance (frequency of new product introduction, product development lead times, product innovation, and on‐time product launch).     

The Management Skills of Russians: Do Work,Management, and Government Experiences Matter?

This study examines the impacts of different types of experience on management skills of working adults in Russia. The study is based on a sample of 527 MBA students, line and middle managers covering 32 regions in 13 different industries in Russia. This study proves that work experience, management experience, and government experience are significant factors in their technical, human, and conceptual skills. Human skills scores are significantly higher for all groups than group with no management experience. Score for human skills increased with years of government experience only, but not with working or management years of experience.     

Managerial incentive, organizational slack, and performance: empirical analysis of Japanese firms’ behavior

The main purpose of this study is to investigate how organizational slack is created and how it affects a firm’s performance. To address these questions, we construct three equations: managerial incentive function, organizational slack formation function and performance function, and we apply 3SLS simultaneously to these functions by using the data sets of 2,791 Japanese firms from the years 2001 and 2006. From the empirical analysis of these Japanese firms, we obtain the following results: a firm’s performance declines as organizational slack increases; organizational slack is affected by annual change rate of revenues but not by managerial incentive; managerial incentive decreases as a firm’s performance improves while it increases as the structure of corporate governance is strengthened.