| This study examines changing employee benefit practices and the organizational factors that predict corporate strategies for compensating workers. Data are analyzed from an original national survey sample of 2,800 U.S. businesses. Compensation strategies are operationalized based on the types and combinations of employee benefit plans companies sponsor and the underlying implicit contracts various packages represent. A conceptual model is developed which integrates insights from conventional approaches to compensation in the sociological and microeconomic literatures, emphasizing economic constraints and market mechanisms, with organizational theories emphasizing sociopolitical processes, environmental resources, and institutional mechanisms of change (Pfeffer and Salancik, 1978; DiMaggio and Powell, 1983).; The general hypothesis of the study is that institutional and economic environments of businesses, organizational structure and internal workforce characteristics account for qualitative differences among compensation practices. The empirical analysis utilizes cluster analytic techniques to identify four types of benefit strategies: market wage, traditional, flexible, and combination. Multinomial and logistic regression modeling are then used to identify factors predicting cluster packages and separate benefit plans.; Cross-sectional data on corporate strategies are supplemented with trend data summarized from government sources. Trend data indicate contemporary benefit practices are becoming increasingly flexible in form. New growth patterns are characterized by plans extending short-term benefit protections in contrast to traditional long-term benefit plans providing workers income and health security into retirement. Flexible benefit planning is viewed as a response to industrial restructuring and economic decline, globalization of markets and tax and benefit reform legislation.; Results indicate that political (unions and state involvement) and work culture factors (firm age, period of market entry, social demographic and occupational workforce composition), as well as classic economic organization variables (size, revenues, and technology) predict corporate strategies. Firm size is by far the strongest and most consistent predictor of benefit strategies, with large firms using more comprehensive combination strategies, and smaller firms using market wage strategies with few benefits, or one of the single-approach benefit strategies.; Consistent with recent trends in layoffs, plant closings and the "externalization" of labor costs, innovative benefit design suggests the traditional employment relationship is weakening. In a shifting and volatile economic environment workers will likely experience serious difficulties in future years as the relative number of jobs providing long-term employment security declines. |
