Allocation of self-reward from continuous improvement initiatives: A hierarchical regression analysis of employee equity determinants in a simulated private sector firm

This study focuses on motivational factors for employee participation in continuous improvement (CI) activities in a for-profit firm. Framing concepts are equity theory; equity sensitivity theory; psychology of personality research, specifically the five-factor model; cross-cultural psychology, specifically the individualism collectivism (IND-COL) construct; and charitable giving research. A survey incorporating different hypothetical situational conditions simulating employee participation in CI was conducted to elicit equitable self-reward responses from a sample of working graduate and undergraduate U.S. college students. Participants also responded to human-factors measurement instruments. The participant sample size was n = 101. Analysis was accomplished by correlation, ordinary regression and multilevel regression analysis to evaluate the variation that could be explained by variation in both human factors and situational conditions. The study found the independent variables group involvement, firm social responsibility, firm sponsorship of CI, general economic conditions and horizontal collectivism to be statistically significant in predicting equity attitudes. A quantitative multilevel predictive model was developed based on these variables. Predicted equitable self-rewards ranged from approximately 5% to 44% over the general range of predictive variables in this study. The standard error of the regression model for a given individual in a given situation was 18.80%. The standard error of the regression model for the average response of the group of 101 participants for a given situation was 1.22%. Recommendations are made for firm tailoring of CI reward structures based on situational conditions to optimize perceived reward equity. Recommendations for further research are also provided.