IDEAS home Printed from https://ideas.repec.org/a/osi/bulimm/v15y2015p189-200.html
   My bibliography  Save this article

Variable Pay: A Case Study In Warehouse Logistics

Author

Listed:
  • Ilija Coric

    (MCI d.o.o.)

  • Katija Vojvodic

    (University of Dubrovnik, Department of Economics and Business Economics)

Abstract

The use of variable pay schemes has been identified as a means of rewarding employees in order to increase their motivation and productivity. However, experiences from post-transition economies show prevalent use of variable pay model in the sales sector. The reason behind that is insufficient interest by top management into other sectors, such as supply chain management. In addition, supply chain management and different types of distribution channels have not yet been recognized as the sources of competitive advantage. Furthermore, when compared to the sales sector, performance is hard to measure within the supply chains suggesting the need for more complex performance indicators. The main aim of this paper is to present the introduction of variable pay schemes in warehouse logistics leading to productivity improvement. In that context, a case study method is used to compare warehouse employees’ fixed and variable pay and their impact on employees’ performance. The results reveal significant differences in warehouse employees’ performance outputs after introducing variable pay schemes. The research is limited by the levels of technology used in the warehouse operations. Consequently, the lack of a precise classification of warehouse employees’ activities can be noted indicating the need to include subjective indicators in the analysis. Finally, performance management in post-transition economies is still rather delicate field with top management still being sceptical about the use of performance pay schemes. In that sense, the efforts should be made to develop efficient solutions to improve employee motivation and performance.

Suggested Citation

  • Ilija Coric & Katija Vojvodic, 2015. "Variable Pay: A Case Study In Warehouse Logistics," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 15, pages 189-200.
    • Handle: RePEc:osi:bulimm:v:15:y:2015:p:189-200
    as

    Download full text from publisher

    File URL: http://www.efos.unios.hr/repec/osi/bulimm/PDF/BusinessLogisticsinModernManagement15/blimm1513.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eriksson, Tor & Villeval, Marie Claire, 2008. "Performance-pay, sorting and social motivation," Journal of Economic Behavior & Organization, Elsevier, vol. 68(2), pages 412-421, November.
    2. W.D. McCausland & K. Pouliakas & I. Theodossiou, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," Labor and Demography 0505019, University Library of Munich, Germany.
    3. Yeh, Wan-Yu & Cheng, Yawen & Chen, Chiou-Jung, 2009. "Social patterns of pay systems and their associations with psychosocial job characteristics and burnout among paid employees in Taiwan," Social Science & Medicine, Elsevier, vol. 68(8), pages 1407-1415, April.
    4. repec:eme:ijmpps:v:34:y:2013:i:1:p:465-485 is not listed on IDEAS
    5. Julie Cloutier & Denis Morin & Stéphane Renaud, 2013. "How does variable pay relate to pay satisfaction among Canadian workers?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 34(5), pages 465-485, August.
    6. Harald Dale‐Olsen, 2012. "Sickness absence, performance pay and teams," International Journal of Manpower, Emerald Group Publishing Limited, vol. 33(3), pages 284-300, June.
    7. Fidan Ana Kurtulus & Douglas Kruse & Joseph Blasi, 2011. "Worker Attitudes Towards Employee Ownership, Profit Sharing and Variable Pay," UMASS Amherst Economics Working Papers 2011-15, University of Massachusetts Amherst, Department of Economics.
    8. Kuhn, Kristine M. & Yockey, Mark D., 2003. "Variable pay as a risky choice: Determinants of the relative attractiveness of incentive plans," Organizational Behavior and Human Decision Processes, Elsevier, vol. 90(2), pages 323-341, March.
    9. Erling Barth & Bernt Bratsberg & Torbjørn Hægeland & Oddbjørn Raaum, 2008. "Who pays for performance?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(1), pages 8-29, March.
    10. Konstantinos Pouliakas & Nikolaos Theodoropoulos, 2012. "The Effect of Variable Pay Schemes on Workplace Absenteeism," Research in Labor Economics, in: Research in Labor Economics, pages 109-157, Emerald Group Publishing Limited.
    11. Conyon, Martin & Peck, Simon & Read, Laura, 2001. "Performance pay and corporate structure in UK firms," European Management Journal, Elsevier, vol. 19(1), pages 73-82, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ilija Coric & Katija Vojvodic, 2018. "Variable Pay 2.0: Transforming The Post-Transitional Context In Warehouse Logistics," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 18, pages 109-123.
    2. Maczulskij, Terhi & Haapanen, Mika & Kauhanen, Antti & Riukula, Krista, 2021. "Dark Half: Decentralized Bargaining and Well-Being at Work," IZA Discussion Papers 14654, Institute of Labor Economics (IZA).
    3. Weiyi Zhang & Hiromasa Takahashi & Junyi Shen, 2016. "Does Physical Exercise Affect Tradeoffs between Fixed Pay and Performance-related Pay for Individuals?," Discussion Paper Series DP2016-13, Research Institute for Economics & Business Administration, Kobe University.
    4. Harald Dale-Olsen, 2014. "Sickness Absence, Sick Leave Pay, and Pay Schemes," LABOUR, CEIS, vol. 28(1), pages 40-63, March.
    5. Bhaskar, Ratikant & Bansal, Shashank & Abbassi, Wajih & Pandey, Dharen Kumar, 2023. "CEO compensation and CSR: Economic implications and policy recommendations," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 232-256.
    6. Anja Schöttner & Veikko Thiele, 2010. "Promotion Tournaments and Individual Performance Pay," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 699-731, September.
    7. Cueto, Begona & Pruneda, Gabriel, 2015. "Job Satisfaction of Wage and Self-Employed workers. Do preferences make a difference?," MPRA Paper 65432, University Library of Munich, Germany.
    8. Goswami, Indranil & Urminsky, Oleg, 2021. "Don’t fear the meter: How longer time limits bias managers to prefer hiring with flat fee compensation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 162(C), pages 42-58.
    9. Michalis Drouvelis & Julian C. Jamison, 2015. "Selecting public goods institutions: Who likes to punish and reward?," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 501-534, October.
    10. repec:lan:wpaper:2928 is not listed on IDEAS
    11. Nicolas R. Ziebarth & Martin Karlsson, 2014. "The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 208-230, March.
    12. Alberto Bayo-Moriones & Jose Enrique Galdon-Sanchez & Sara Martinez-De-Morentin, 2013. "The Diffusion of Pay for Performance across Occupations," ILR Review, Cornell University, ILR School, vol. 66(5), pages 1115-1148, October.
    13. Kenju Kamei & Thomas Markussen, 2023. "Free Riding and Workplace Democracy—Heterogeneous Task Preferences and Sorting," Management Science, INFORMS, vol. 69(7), pages 3884-3904, July.
    14. Wang, Zhen & Vukina, Tomislav, 2017. "Sorting into Contests: Evidence from Production Contracts," ARE Working Papers 262930, North Carolina State University, Department of Agricultural and Resource Economics.
    15. Snežana Lekić & Jelena Vapa-Tankosić & Slavica Mandić & Jasmina Rajaković-Mijailović & Nemanja Lekić & Jelena Mijailović, 2020. "Analysis of the Quality of the Employee–Bank Relationship in Urban and Rural Areas," Sustainability, MDPI, vol. 12(13), pages 1-22, July.
    16. Gabriele Mazzolini, 2014. "The economic consequences of accidents at work," DISCE - Working Papers del Dipartimento di Economia e Finanza def015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    17. Brown, Sarah & Gray, Daniel & McHardy, Jolian & Taylor, Karl, 2015. "Employee trust and workplace performance," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 361-378.
    18. Kauhanen, Antti & Piekkola, Hannu, 2002. "Profit Sharing in Finland: Earnings and Productivity Effects," Discussion Papers 817, The Research Institute of the Finnish Economy.
    19. Böckerman, Petri & Bryson, Alex & Ilmakunnas, Pekka, 2012. "Does high involvement management improve worker wellbeing?," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 660-680.
    20. Benoît Mahy & François Rycx & Mélanie Volral, 2011. "Wage Dispersion and Firm Productivity in Different Working Environments," British Journal of Industrial Relations, London School of Economics, vol. 49(3), pages 460-485, September.
    21. Raymond P. Guiteras & B. Kelsey Jack, 2014. "Incentives, Selection and Productivity in Labor Markets: Evidence from Rural Malawi," NBER Working Papers 19825, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osi:bulimm:v:15:y:2015:p:189-200. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Davor Dujak,PhD (email available below). General contact details of provider: https://edirc.repec.org/data/efosihr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.