The Effects of Research and Development Intensity on Managerial Compensation in Large Organizations
Milkovich, George T.; Gerhart, Barry A.; Hannon, John M.
Agency theory, leading edge, and administrative life cycle perspectives all predict that organizations having high levels of Research and Development (R&D) intensity will follow different compensation strategies than organizations that are less R&D intensive. Using data from 110 organizations over a 5 year period, and controlling for organization differences in employee and job characteristics, we found support for this general prediction. Specifically, high R&D intensity organizations tended to have higher relative base pay, higher relative bonus pay, and greater relative eligibility for long-term incentive payments. We discuss the importance of further research into compensation decisions in R&D intensive firms, particularly the effects of such decisions on firms' competitiveness.
CAHRS; ILR; center; human resource; job; worker; advanced; labor market; satisfaction; employee; work; manage; management; U.S.; firms; growth performance; compensation; R&D; research and development; employee; base pay; bonus pay; long-term incentive