ABSTRACT
This chapter presents the results of a recent survey of 240 Canadian companies, including the incidence of thirteen specific types of performance pay plans, their extent of employee coverage, and the factors associated with their adoption. The expectation was that high-involvement organizations would be more likely to have pay plans based on group/team and organizational performance than traditional organizations, but not necessarily more individual performance pay. A number of studies have identified factors that may be linked to a firm’s choice of particular performance pay plans. Strategic choice theory predicts that larger firms will be more likely to institute performance pay, because they are more likely to have the compensation specialists in house to initiate, design, and manage performance pay. The great majority of firms reported that they used at least one of the several performance pay plans for at least some of their employees.
