Compensation Managers' Beliefs About Strategies That Affect Compensation Program Goals

How to Cite

Compensation Managers’ Beliefs About Strategies That Affect Compensation Program Goals. (1996). Journal of Business Strategies, 13(1), 65-88.


A study was conducted to investigate whether individual compensation program goals of recruitment effectiveness, motivational effectiveness, administrative manageability, cost effectiveness, retaining employees and encouraging poor performers to leave were differentially impacted by eleven compensation strategies. It was found that compensation strategies did have differential effects on perceptions of the effectiveness of the compensation goals. While participation in compensation plan design and internal consistency were the most consistent predictors, there was significant variation in the compensation strategies that were predictive across all effectiveness perception variables. Based on these results, compensation managers should carefully consider the organization’s strategy and desired employee behaviors before designing compensation programs.


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