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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. 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.
    2. J Taylor & S Bradley & A N Nguyen, 2003. "Job autonomy and job satisfaction: new evidence," Working Papers 541528, Lancaster University Management School, Economics Department.
    3. 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.
    4. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.
    5. 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.
    6. Propper, Carol & von Hinke Kessler Scholder, Stephanie & Tominey, Emma & Ratto, Marisa & Burgess, Simon, 2010. "Smarter Task Assignment or Greater Effort: the impact of incentives on team performance," Economics Papers from University Paris Dauphine 123456789/4727, Paris Dauphine University.
    7. Raith, Michael, 2004. "Specific Knowledge and Performance Measurement," CEPR Discussion Papers 4262, C.E.P.R. Discussion Papers.
    8. Barth, Erling & Bratsberg, Bernt & Haegeland, Torbjørn & Raaum, Oddbjørn, 2006. "Who Pays for Performance?," IZA Discussion Papers 2142, Institute for the Study of Labor (IZA).
    9. Armin Falk & Andrea Ichino, 2006. "Clean Evidence on Peer Effects," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 39-58, January.
    10. 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.
    11. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    12. 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.
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