Business Strategy, Compensation Policy and Innovation Performance: A Behavioral Perspective. (September 2017)

• Record Type: Journal Article
• Authors: Chen, Liqiang; Wang, Jing
• Is Part Of: Compensation & benefits review. Volume 49:Number 4(2017)
• Page Start: 189
• Page End: 205
• Publication Date: 2017-09
• Subjects: strategic compensation -- organization-level incentives -- business strategy -- innovation performance; Wages -- United States -- Periodicals; Compensation management -- United States -- Periodicals; Employee fringe benefits -- United States -- Periodicals; Executives -- Salaries, etc -- United States -- Periodicals; 658.222
• DOI: 10.1177/0886368718798423
• Languages: English
• ISSNs: 0886-3687

Abstract

This article applies new insights into business strategies and compensation to examine why organizations adopt pay polices based on the performance of the entire organization (i.e., organization-level incentives such as profit sharing and gain sharing). Results based on a longitudinal national sample of 1, 974 Canadian workplaces show that organizations with product leadership business strategies are more likely to adopt organization-level incentives, which in turn have a positive impact on innovation performance. Implications of the findings for theory, future research and management practice are also discussed.