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The antecedents of satisfaction with pay in teams: do performance-based compensation and autonomy keep team-members satisfied?

  • Ana-Maria Godeanu

    ()

    (Department of Business Administration, Universidad Carlos III of Madrid, Spain)

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    This paper aims to investigate the effects performance-based compensation and autonomy on satisfaction with pay in the context of team working. I develop a complex perspective that considers the influence of different monetary and non-monetary rewards on satisfaction with pay. Drawing from the agency theory, equity theory and theory of cooperation I predict that both piece rates and team-based rewards are associated with higher pay satisfaction. Moreover, I claim that both individual and team-based autonomy contribute to increased satisfaction with pay. Using a cross-sectional dataset of randomly selected European employees who are asked about specific working and living conditions, results confirm that both productivity-based rewards and autonomy are important for employee satisfaction. Managers should know when to introduce rewards based only on individual merits and when to give to use autonomy as a buffer to compensate for the potential lack of fairness in the payment system.

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    File URL: http://ejes.uaic.ro/articles/EJES2012_0301_GOD.pdf
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    Article provided by Centre for European Studies, Alexandru Ioan Cuza University in its journal Eastern Journal of European Studies.

    Volume (Year): 3(1) (2012)
    Issue (Month): (June)
    Pages: 145-168

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    Handle: RePEc:jes:journl:y:2012:v:3:p:145-168
    Contact details of provider: Web page: http://cse.uaic.ro

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    1. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August.
    2. Armin Falk & Andrea Ichino, 2004. "Clean Evidence on Peer Effects," Levine's Bibliography 666156000000000439, UCLA Department of Economics.
    3. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    4. Michael K Hui & Kevin Au & Henry Fock, 2004. "Empowerment effects across cultures," Journal of International Business Studies, Palgrave Macmillan, vol. 35(1), pages 46-60, January.
    5. Simon Burgess & Carol Propper & Marisa Ratto & StephanievonHinke KesslerScholder & Emma Tominey, 2010. "Smarter Task Assignment or Greater Effort: The Impact of Incentives on Team Performance," Economic Journal, Royal Economic Society, vol. 120(547), pages 968-989, 09.
    6. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2010. "Social Incentives in the Workplace," Review of Economic Studies, Oxford University Press, vol. 77(2), pages 417-458.
    7. Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 1-49, February.
    8. Michael Raith, 2008. "Specific knowledge and performance measurement," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 1059-1079.
    9. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
    10. Erling Barth & Bernt Bratsberg & Torbjørn Hægeland & Oddbjørn Raaum, 2008. "Who pays for performance?," International Journal of Manpower, Emerald Group Publishing, vol. 29(1), pages 8-29, May.
    11. J Taylor & S Bradley & A N Nguyen, 2003. "Job autonomy and job satisfaction: new evidence," Working Papers 541528, Lancaster University Management School, Economics Department.
    12. Canice Prendergast, 2002. "The Tenuous Trade-off between Risk and Incentives," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1071-1102, October.
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