Lump-Sum Bonus Satisfaction: Testing the Construct Validity of a New Pay Satisfaction Dimension

There are both practical and theoretical reasons to measure lump-sum bonus satisfaction. The practical need for such a measure stems from its increased use as a component in modern compensation practices. Based on the means of administering and allocating lump-sum bonuses, a theoretical case can be built suggesting that lump-sum bonus satisfaction constitutes a separate component of pay satisfaction fitting into the Pay Satisfaction Questionaire\u27s (PSQ) theoretical framework. We develop 4 questions that complement the PSQ, and use a series of techniques to test the convergent and discriminant validity of the measure. Empirical evidence shows that bonus-related items are more related to the lump-sum bonus satisfaction measure than other PSQ dimensions. We also demonstrate that the dimension of lump-sum bonus satisfaction has a substantive relationship with attitudinal variables beyond that provided by pay level variables and the PSQ. The development of this measure should foster greater accuracy when assessing pay satisfaction levels and the effects of lump-sum bonus pay policies

Labor Market Institutions and Global Strategic Adaptation: Evidence from Lincoln Electric

Although one of the central questions in the global strategy field is how multinational firms successfully navigate multiple and often conflicting institutional environments, we know relatively little about the effect of conflicting labor market institutions on multinational firms' strategic choice and operating performance. With its decision to invest in manufacturing operations in nearly every one of the world's largest welding markets, Lincoln Electric offers us a quasi-experiment. We leverage a unique data set covering 1996–2006 that combines data on each host country's labor market institutions with data on each subsidiary's strategic choices and historical operating performance. We find that Lincoln Electric performed significantly better in countries with labor laws and regulations supporting manufacturers' interests and in countries that allowed the free use of both piecework and a discretionary bonus. Furthermore, we find that in countries with labor market institutions unfriendly to manufacturers, Lincoln Electric was still able to overcome most (although not all) of the institutional distance by what we term flexible intermediate adaptation