Managing Strategic Pay: Dualities and Dilemmas

Research output: Contribution to ConferenceAbstract

Abstract

According to contingency perspectives of strategic pay, there is a central question that firms face: is it better to follow an externally-driven, market-based alignment with business strategy or a more internally focussed, job-based alignment with human capital? These ‘best fit’ dimensions are often presented as polar: external fit versus internal fit; vertical fit versus horizontal fit; acquisition-oriented versus development-oriented; market-based employment versus job-based employment. Strategic pay choices are similarly framed as ‘either / or’ dilemmas: hierarchical or egalitarian; fixed or variable; individual or team-based; market- or internal equity-based; open or secret; long- or short-term and so on.

This paper presents findings from survey data collected from 269 firms on pay practices in the UK that strongly suggests strategic pay is not practised in such a binary way. Data were analysed using a range of statistical techniques including independent T-tests, tests of association and logistic regression analysis. While results offer evidence indicating some limited alignment between pay practices and business strategy; and pay practices and human capital characteristics, the emerging picture of UK pay practices is a more complex and ambiguous one.

In making sense of these findings an alternative perspective is proposed. Duality theories view ostensibly contradictory elements as unescapably coexistent or even as necessary components of a larger, harmonised whole. This concept offers an alternative perspective from which to examine the apparently opposing dilemmas of strategic pay. It recognises that organisations may be simultaneously subject to opposing forces and suggests the possibility of such apparent ‘tensions’ being reconciled or at least being held in equivalence by organisations as they devise pay responses that are similarly multifaceted.

This paper contributes to theory and knowledge in two principal ways: first, the empirical results challenge accepted notions of the contingency-based strategic pay model that dominates both academic literature and professional commentary; second, it offers the duality perspective as an alternative to the contingency approach that has not been previously explored in the strategic pay literature and which, it is proposed, may be a useful alternate starting position for future research in this field.
Original languageEnglish
Publication statusPublished - 2016
EventManaging Dilemmas in Human Services International Conference - Northampton
Duration: 13 Sep 201614 Sep 2016
Conference number: 19

Conference

ConferenceManaging Dilemmas in Human Services International Conference
Period13/09/1614/09/16

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