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Group-based pay-for-performance plans and firm performance: The moderating role of empowerment practices

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  • Hyondong Kim
  • Kyra Sutton
  • Yaping Gong

Abstract

As the popularity of group-based pay-for-performance plans persists, compensation researchers are exploring the conditions under which these plans contribute to the financial performance of firms. Based on a sample of 1,933 employees from 415 companies in South Korea, we found that group-based pay-for-performance plans enhance both objective and subjective measures of firm performance. Furthermore, consistent with the contingency perspective of fit, we found that empowerment practices positively moderate the relationship between group-based pay-for-performance plans and firm performance. These findings suggest that empowerment can enhance the effectiveness of such pay plans. We discuss implications for research and practice. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Hyondong Kim & Kyra Sutton & Yaping Gong, 2013. "Group-based pay-for-performance plans and firm performance: The moderating role of empowerment practices," Asia Pacific Journal of Management, Springer, vol. 30(1), pages 31-52, March.
    • Handle: RePEc:kap:asiapa:v:30:y:2013:i:1:p:31-52
    DOI: 10.1007/s10490-011-9255-7
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    References listed on IDEAS

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    1. Wagner, John A. & Rubin, Paul A. & Callahan, Thomas J., 1988. "Incentive payment and nonmanagerial productivity: An interrupted time series analysis of magnitude and trend," Organizational Behavior and Human Decision Processes, Elsevier, vol. 42(1), pages 47-74, August.
    2. Rabi Bhagat & Annette McDevitt & Ian McDevitt, 2010. "On improving the robustness of Asian management theories: Theoretical anchors in the era of globalization," Asia Pacific Journal of Management, Springer, vol. 27(2), pages 179-192, June.
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