Effectiveness of Individual and Aggregate Compensation Strategies

Luis Gomez-Mejia, DAVID B. BALKIN

Research output: Contribution to journalArticlepeer-review

167 Scopus citations


Based on a sample of 175 scientists and engineers, this study shows that individual‐based rewards (either in the form of merit pay or individual bonuses) are perceived as less effective than aggregate incentive strategies for R & D workers. The pay effectiveness measures used here include pay satisfaction, propensity to leave, project performance, and individual performance. All things considered, team‐based bonuses are perceived as the most effective rewards in an R & D setting. The findings also indicate that employees with a low willingness to take risks are more likely to experience withdrawal cognition if they work for a firm that relies on variable compensation.

Original languageEnglish (US)
Pages (from-to)431-445
Number of pages15
JournalIndustrial Relations
Issue number3
StatePublished - 1989
Externally publishedYes

ASJC Scopus subject areas

  • Industrial relations
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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