"Compensation-Organization" Matching And The Effect Of Their Matching On Compensation Effectiveness

The management of compensation, as an important managerial function conducing to increase competitive advantages and achieve the goals of the organizations, has more and more become a strategy other than an implement. But how to help enterprises gain and keep competitive advantages, which has increasingly become the focus of the researchers. One critical element in designing and implementing a unique reward system is to carefully tailor the design and implementation of the reward system to the business strategy, structure and culture of the organization. The effectiveness of creating an alignment between these organizational systems has been clearly established in the practitioner and academic literature. Missing from both the practitioner and academic literature, however, is guidance on how to align these organizational systems.We tried to explore the matching compensation systems to different types of enterprises. The empirical findings were based on the survey responses of 127 human resource management executives from. The hypotheses were largely supported. The main results were showed as follows:1. Compensation systems' strategic characteristics included unit of analysis, value comparison, reward measure, reward level, pay increase, administrative level, timing and communications. Enterprises with different business strategies, organizational cultures and organizational structures show significant discrepancies in the compensations characteristics.2. Enterprises as prospectors in business strategies, having involved organizational cultures or having organic organizational structures are matched to the compensations systems with analysis by person, external comparison, measures by results, reward level of business unit, variable pay increase, decentralized administration, lagging behind other strategies and open communications.3. Enterprises as defenders in business strategies, having traditional organizational cultures or having mechanistic organizational structures are matched to the compensations systems with analysis by job, internal comparison, measures by behaviors, reward level of individual, fixed pay increase, centralized administration, leading other strategies and closed communications.4. We validated the matching model between compensation characteristics and organizational types. In this model, the higher degree of matching is, the higher scores of compensation effectiveness assessment and pay satisfaction.