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Right on the Money? The Contingent Effects of Strategic Orientation and Pay System Design on Firm Performance

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dc.contributor.authorTenhiälä, Aino
dc.contributor.authorLaamanen, Tomi
dc.contributor.funderKulttuurin ja Yhteiskunnan Tutkimuksen Toimikunta
dc.contributor.funderAcademy of Finland
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2025-04-01T10:47:25Z
dc.date.available2025-04-01T10:47:25Z
dc.date.issued2018-09-14
dc.description.abstractThis paper extends prior research on the performance implications of the fit between a firm’s strategic orientation and its pay system design. Whereas prior research has shown that matching the pay system design to the strategic orientation of the firm generally contributes to higher performance, most studies have examined the pay systems of the upper echelons and employees separately. Based on an analysis that accounts for both horizontal and vertical pay dispersion, we find that whereas growth-oriented firms (prospectors) tend to benefit from high horizontal pay dispersion, efficiency-oriented firms (defenders) perform better with high vertical pay dispersion and low relative base pay. Overall, our findings contribute to an improved understanding of how to optimize the pay systems of firms with different strategic orientations.
dc.description.peerreviewedyes
dc.description.statusPublished
dc.formatapplication/pdf
dc.identifier.citationTenhiälä, A., & Laamanen, T. (2018). Right on the money? The contingent effects of strategic orientation and pay system design on firm performance. Strategic Management Journal, 39(13), 3408-3433. https://doi.org/10.1002/smj.2953.
dc.identifier.doihttps://doi.org/10.1002/smj.2953
dc.identifier.issn0143-2095
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3682
dc.issue.number13
dc.journal.titleStrategic Management Journal
dc.language.isoen
dc.page.final3433
dc.page.initial3408
dc.page.total44
dc.publisherWiley
dc.relation.departmentHuman Resources & Organisational Behaviour
dc.relation.entityIE University
dc.relation.schoolIE Business School
dc.rightsAttribution 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/deed
dc.subject.keywordPay system
dc.subject.keywordStrategic orientation
dc.subject.keywordContingency theory
dc.subject.keywordIncentives
dc.subject.keywordPerformance
dc.titleRight on the Money? The Contingent Effects of Strategic Orientation and Pay System Design on Firm Performance
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/acceptedVersion
dc.volume.number39
dspace.entity.typePublication
relation.isAuthorOfPublication267f71e9-ce8c-44bc-bec7-2110fabb94e1
relation.isAuthorOfPublication.latestForDiscovery267f71e9-ce8c-44bc-bec7-2110fabb94e1
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