A limited number of studies have addressed the idea of 'strategic ' reward systems-the matching of compensation systems to a firm's strategy. Prior research on this topic has been confined to U.S. firms, however, and a number of key questions remain unanswered. Using a sample of 917 employees from two large Swiss financial institutions, we found that pay systems are linked with divisional strategic orientation, but in a different form than prior studies. Additionally, we identify hierarchical position as an important variable in the tailoring of reward systems. Hierarchy has a significant main effect on pay plan design, and an interactive effect with strategic orientation.
- Contingency theory
- Managerial discretion
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management