Tomorrow\u27s Compensation and Rewards Shaped by Today\u27s Choices

[Excerpt] Today\u27s trends shape tomorrow. This is as true for the weather as it is for the way people are paid. Employee compensation in the future is being shaped by the choices we make today. So, by examining these choices, we can sketch a picture of tomorrow\u27s compensation. This isn\u27t to say that the past predicts the future. This is no more true in our field than it is in weather forecasting. But by analyzing the forces affecting today\u27s trends, we are better able to understand tomorrow. And, I believe it is important to understand how employee compensation will be determined and what the consequences of different approaches will be. For the way employees are compensated affects their financial well being, their skills and knowledge and their self worth. Compensation directly impacts the economic effectiveness of employers and the talents of a nation\u27s human resources. Finally, the way employees are compensated exhibits society\u27s sense of social justice

Restructuring of Human Resource Management in the United States

[Excerpt] Change is endemic to market-based economies and consequently to the employment relationships embedded in them. Hence, it is yesterday\u27s news that the terms and conditions under which people work in the United States are changing. Historically, the pace of this change has varied. But the restructuring of capital assets eventually affects the relations between employees and employers

Restructuring of Human Resource Management In The U.S.: Strategic Diversity

Change is endemic in the U. S. economy and in worker-management relations. This change can be examined from the perspective of increasing centralization in which public policy dictates that corporations and the state act in concert, to a decentralized market system in which assets are constantly being reconfigured to more productive uses. This paper looks at the evolution of industrial relations and personnel administration to human resource management within this context of continual change through centralized versus decentralized perspectives. Major shifts in HR policies in American companies are described. Within these major shifts, a wide diversity of policy options for workermanagement relations exist. A strategic-contingency model may provide a unifying framework to assist decision makers in choosing among these policy options

Minimizing Competition? Entry-level Compensation in Japanese Firms

This is the first empirical study of the determinants of pay for entry-level jobs among Japanese firms. Pay data of 1,382 companies obtained from the Nikkei survey was matched with company size, performance, industry, and foreign ownership data from Toyo Keizai’s Japan Company Handbook. We found that unlike the results based on U.S. data, company size is not related to entry-level pay. Firm performance is positively related, but its effect is minimal. Industry membership and foreign ownership are positively related. We believe that these findings highlight the influence of the Japanese employment context and information sharing in Japan. Implications for research and practice are discussed

A SHRM Perspective on International Compensation and Reward Systems

We re-examine the efficacy of the SHRM perspective from the vantage point of a specific HRM system, international compensation and rewards, to gain new insights into existing conceptual models. Looking at SHRM from the ground up suggests that, to continue informing our understanding of the HRM-organizational effectiveness (OE) relationship, research will need to adopt richer theory and measures of specific HRM systems and extrapolate important contextual factors that influence relationships between OE and specific HRM systems

Back to the Future: A Century of Compensation

What were the hot compensation issues and practices over the past century? Does history offer any lessons that may inform our compensation decisions in the future? To answer these questions, we reviewed newspapers and business publications from the past 100 years. To highlight changes in compensation systems during that time, we selected four topics to examine in detail in this paper: compensation\u27s role in the changing nature of the deal; the evolution of pay-for-performance; the emergence of benefits; and the bellwethers of compensation systems. Four lessons for the future are drawn. These include: End the search for the one right compensation strategy; Understand what in the context matters; Continue pragmatic experimentation, and Support continuous learning about compensation. Readers are invited to delve into the history of compensation to discover what they take away for the future

Origin of CEO and Compensation Strategy: Differences between Insiders and Outsiders

Increasingly, U.S. firms are hiring their new CEOs from outside the firms. This study investigates the differences in compensation between outsider CEOs and insider CEOs from three dimensions: pay level, pay and performance link, and pay mix. Our analyses show: (1) outsider CEOs are paid more than insider CEOs, (2) pay and performance link is very weak for outsider CEOs, and (3) compensation package for outsider CEOs emphasizes the use of stock options. While several factors (e.g., firm size, firm performance, CEO tenure, ownership structure) influence insider CEOs\u27 pay, firm size is the only determinant of outsider CEOs\u27 pay. Our results suggest we will be able to understand CEO compensation more accurately if we analyze CEOs from different origins (insiders, outsiders, founders) separately

Issues in Managerial Compensation Research

[Excerpt] Compensation is at the core of any employment exchange (Milkovich & Newman, 1993; Simon, 1951). It is probably the most basic reason people agree to become employees and it serves as a defining characteristic of any employment relationship (March & Simon, 1958). Recently, managers have been bombarded with a profusion of ways to pay employees. There is team-based pay, broad-banding, pay at risk, paying for competencies, paying for skills, and even The New pay. Understanding which of these have the potential to add value and which are relatively more effective is a tough task, like untying the Gordian knot. Rather than simply cutting through the problem (Alexander the Great\u27s tack), managers often seek guidance from research. Yet, researchers have also been bombarded - not just with new practices, but also with new theories. Included in this theoretic barrage is agency theory, tournament models, contingency theory, institutional theory, procedural justice, political influence theory, organizational demography, resource dependency, psychological contracts, and the resource-based view of the firm. The list seems almost endless. If Lord Keynes is correct that theories drive practical peoples\u27 decisions, understanding which of these theories is useful and which is not is important for both compensation researchers and practical decision makers

The Diffusion of Human Resource Innovations: The Case of Flexible Benefits Plans

The purpose of this paper is to examine the implications of current theories for organizations\u27 decisions about employee benefits. Drawing on organizational and economic theories, we offer alternative explanations for patterns in the adoption and design of flexible benefits plans. An integrated model of firms\u27 flex plan decisions is presented

A Theoretical Exploration of the Adoption and Design of Flexible Benefit Plans: A Case of Human Resource Innovation

This article explores theoretical explanations of managers\u27 decisions about flexible benefit plans. We (1) examine the adoption and design of flexible benefit plans through four theoretic lenses: institutional, resource dependence, agency, and transaction costs; (2) integrate the relevant insights gained from these theories into a more complete model and derive propositions for future research; and (3) generalize the insights gained from exploring a specific innovation to broader questions surrounding decisions about other human resource innovations