Strategic Compensation: Does Business Strategy Influence Compensation In High-Technology Firms?

Topics:
Compensation Guide
Tags:
Benefits,
Business Strategy,
Compensation,
Human Resources,
Industry,
Management,
Strategy
Source:
Cornell University

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Overview: This study examined whether a firm's business strategy influences the firm's compensation systems in high-technology firms. For the firm strategy variable, it used innovation strategy, which is one of the most critical business strategies in the high-technology industry. The analysis showed that a firm's emphasis on innovation is positively related to the firm's employee pay level, both short-term pay and long-term pay.Innovation is positively associated with the difference in pay level between R&D employees and other employees, time orientation of employee compensation (the relative emphasis on long-term pay to short-term pay), and the length of the stock option vesting period. The influence of innovation is significant after controlling for industry membership.

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Format: PDF | Size: 191KB | Date: Jan 2003 | Pages: 29

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