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

Hyondong Kim, Kyra L. Sutton, Yaping Gong

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

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.

Original languageEnglish
Pages (from-to)31-52
Number of pages22
JournalAsia Pacific Journal of Management
Volume30
Issue number1
DOIs
StatePublished - Mar 2013

Keywords

  • Contingency perspective
  • Empowerment practice
  • Group-based pay-for-performance plan
  • South Korea

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