[We’re pleased to welcome authors Anthony J. Nyberg, Mark A. Maltarich, Dhuha “Dee” Abdulsalam, Spenser M. Essman, and Ormonde Cragun of the University of South Carolina. They recently published an article in Journal of Management entitled “Collective Pay-For-Performance (PFP): A Cross-Disciplinary Review and Meta-Analysis,” which is currently free to read for a limited time. Watch the video abstract the authors have created!
Below, they reveal the inspiration for conducting this research:]
What motivated you to pursue this research?
We investigated collective pay for performance (PFP) – pay that is contingent on collective outcomes – for two reasons: First, collective pay is becoming increasingly important and common among organizations. Second, there appear to be discrepancies between the empirical evidence and theoretical explanations for some of these widely used compensation practices.
Organizations are increasingly using collective PFP to motivate interdependent units; however, research on the topic is dispersed across multiple literature streams, and even findings within literature streams, are often contradictory. For instance, some theoretical perspectives suggest that collective PFP should decrease motivation, particularly among higher performers, resulting in lower unit performance; however, collective PFP is generally positively associated with unit performance. Consequently, we integrated multi-disciplinary research fields to try to reconcile disparate findings and improve our understanding of the relationship between collective PFP and unit performance, and to direct future research towards unanswered collective PFP questions.
In what ways is your research innovative, and how do you think it will impact the field?
In conducting this review, we were able to consolidate research from multiple fields (i.e. organizational behavior/psychology, strategic management, economics, and human resources) and multiple pay types (e.g. profit sharing, stock options, team pay), which allowed us to identify where our knowledge was well developed and where research is still needed. We were able to empirically confirm, through the use of meta-analytic techniques, that collective PFP is positively associated with unit performance. Theoretically, we identified inconsistencies across fields and developed an agenda for future research. It is our hope that other researchers can use this review as a guide to help address important unanswered questions regarding collective PFP.
What did not make it into your published manuscript that you would like to share with us?
The large body of research on collective PFP required substantial time and space to summarize key lessons. Because of this, our manuscript was able to identify but not answer many suggestions for future research. This means that that there remains a need for additional theoretical insights about how collective PFP functions. Specifically, explicating the sorting versus incentive effects and the temporal aspects of collective PFP remain important future topics to be addressed. Additionally, future research should consider examining the effects of collective PFP on alternative outcomes (e.g. competitive advantage) and how collective PFP operates in the context of larger compensation and HR systems.
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