Intra-firm differentiation of compensation systems: Evidence from US high-technology firms

Yoshio Yanadori, Sung Choon Kang

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

While scholars have long recognised the influence of firm decisions on aspects of compensation (e.g. pay level and pay mix), prior compensation studies offer an ambiguous understanding regarding their scope. Some studies argue that firms customise compensation decisions according to employee groups, whereas others assume that firm compensation decisions apply uniformly throughout a firm. To address this research gap, the current study analyses pay levels and pay mixes for R&D employees and administrative employees in US high-technology firms. Our empirical analyses show that firms make distinct compensation decisions for these two job families, but these decisions are ultimately consistent. These findings highlight firms' intention to strike a balance between customising compensation systems according to employee groups and maintaining internal consistency. Our findings add interesting insights to the strategic HRM and talent management literatures, which claim that firms should differentiate among employees when designing HRM systems.

Original languageEnglish
Pages (from-to)236-257
Number of pages22
JournalHuman Resource Management Journal
Volume21
Issue number3
DOIs
Publication statusPublished - 2011 Jul
Externally publishedYes

ASJC Scopus subject areas

  • Organizational Behavior and Human Resource Management

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