Business strategy, compensation policy and innovation performance: A behavioral perspective
Authors: Liqiang Chen and Jing Wang
This article applies new insights into business strategies and compensation to examine why organizations adopt pay polices based on the performance of the entire organization (i.e., organization-level incentives such as profit sharing and gain sharing). Results based on a longitudinal national sample of 1,974 Canadian workplaces show that organizations with product leadership business strategies are more likely to adopt organization-level incentives, which in turn have a positive impact on innovation performance. Implications of the findings for theory, future research and management practice are also discussed.
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