The Impact Of Complex Compensation Systems: A Validity Study Of The Perceptions Of Pay-For-Performance Plans In Multi-Plan Environments
Pay-for-performance (PFP) is a compensation system that has been one of the most widespread compensation tools for motivating employees. Compensation researchers have long discussed the mixed results regarding the effectiveness of PFP plans. This dissertation focuses on the two major factors of why PFP research has yielded mixed evidence regarding the effectiveness of PFP plans - (1) individual feelings of various aspects of PFPs have not been fully captured, and (2) the complexity of the current PFP environments has not been clearly recognized. This dissertation has developed and validated a multi-dimensional measure of individual PFP perceptions in complex pay system environments. Using individual attitudinal data from diverse organizations through an on-line survey, this dissertation identifies three dimensions associated with PFP plans, and develops a measure of PFP perceptions (PFP Perceptions Questionnaire: PPQ) using items in multiple dimensions. It investigates individual feelings and reactions to individuals' multiple PFPs. The results show that individuals form complex conceptualizations of each PFP when they are covered by multiple PFP plans. The validation tests support the distinct perceptions of instrumentality, expectancy, and valence as being critical dimensions of the individuals' PFP perceptions, with evidence of construct validity, convergent validity, discriminant validity, and criterion-related validity.
Compensation; Pay-For-Performance; PFP Perceptions Questionnaire
Sturman, Michael Craig
Hausknecht, John P.; Detert, James Roland
Ph.D. of Hospitality Management
Doctor of Philosophy
dissertation or thesis