Employee Compensation Strategy as Sustainable Competitive Advantage for HR Education Practitioners

Abstract

By building on compensation literature, the current study explored and identified the ties between workers’ competencies, corporate cultures, and compensation schemes. These schemes were typically the subject of literature on the factors dealing with the implementation of incentive systems for pay for performance (PFP) or problems that can lead to a PFP system’s failure. Unfortunately, when it comes to research that HR education practitioners may do, the literature has been scarce. It shows which organizational elements might be necessary to examine when deciding whether a PFP or an alternative compensation program is acceptable. This study aimed to add insight into this gap in research. The findings of this study showed from the use of data from 385 American employees in the manufacturing industry that there are significant relationships statistically between employee competencies and organizational cultures and those findings can be corroborated with existing researches, suggesting compensation schemes were related to multiple types of competence organizations and different organization cultures, thus adding meaningfully to the current literature.