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Matching Compensation System With The Type Of Organizational Culture

Author

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  • Nebojša Janićijević

    (University of Belgrade, Faculty of Economics)

Abstract

The paper explores mutual impact and alignment of organizational culture and compensation system in a company. The starting assumption is that both impact the behavior and performance of employees and that their harmonization is very important for successful functioning of an organization. The mechanism by which the culture of an organization impacts the employees and managers’ compensation system is described, but also vice versa, i.e. how the compensation system impacts the shaping of organizational culture. Starting from the classification of organization culture types known as Competing Values Framework, the compensation system characteristics that are compatible with certain types of organizational cultures are described in detail. It is shown how the purpose and aim of the compensation system, rewarding criterion, the role of the leader, portion of incentive payments, development and formalization of the performance appraisal system, selection of performance criteria and their nature, time horizon of performance appraisal, and development and importance of benefits differ in different types of organizational cultures.

Suggested Citation

  • Nebojša Janićijević, 2013. "Matching Compensation System With The Type Of Organizational Culture," Serbian Association of Economists Journal, SAE - Serbian Association of Economists, issue 5-6, pages 309-324, September.
  • Handle: RePEc:srb:journl:y:2013:i:5-6:p:309-324
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    File URL: http://www.ses.org.rs/ekonomika-preduzeca/2013-5-6-02.pdf
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    References listed on IDEAS

    as
    1. Henri, Jean-Francois, 2006. "Organizational culture and performance measurement systems," Accounting, Organizations and Society, Elsevier, vol. 31(1), pages 77-103, January.
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    More about this item

    Keywords

    organizational culture; motivation; compensation;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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