Influences on reward mix determination: reward consultants' perspectives

Abstract

Purpose

Reward research has focussed on level (what individuals are paid) and structure (relationship between different levels of reward). Less emphasis has been given to reward mix decisions, i.e. the relative proportions of each element making up overall reward. This paper seeks to examine the determinants of reward mix.

Design/methodology/approach

Interview based research with reward consultants as key organisational observers and participants in reward mix decision making.

Findings

Benchmarking has led to the development of reward mix norms. Organisations are under pressure to conform to these norms, moderated by leadership beliefs, the occurrence of events and the extent to which organisations' change capability can overcome strong institutional forces.

Research limitations/implications

The results question agency theory based explanations of reward mix determination and point towards resource dependence and institutional theory perspectives being more suitable theoretical frameworks.

Practical implications

The model developed allows reward managers to consider how the moderating variables, to the dominant mimetic pressure faced, could be manipulated for their firm to allow greater differentiation of the reward mix.

Originality/value

Academically the work contributes to a programme of research into reward determination from a constructionist perspective and aims to provide greater theoretical robustness to the subject. Practically, the findings may prompt practitioners to think more consciously about the drivers of their firm's reward mix. Policy makers may use the stronger theoretical base for understanding the determinants of reward mix choices and the extent to which organisational free choice and institutionally determined choice influence final choices in reward policy decision making.

Citation

Chapman, J. and Kelliher, C. (2011), "Influences on reward mix determination: reward consultants' perspectives", Employee Relations, Vol. 33 No. 2, pp. 121-139. https://doi.org/10.1108/01425451111096677