The discretion of firms in differential reward management

Wei, Qi (2015) The discretion of firms in differential reward management. In: European Academy of Management (EURAM) Annual Conference 2015: Uncertainty is a Great Opportunity; 17 - 20 Jun 2015, Warsaw, Poland.


The discretion of firms in differential reward practices for various employees has become more important with periods of economic uncertainty. Research on the topic has not been well developed, particularly in the context of Asia, such as China. To address this gap, our paper examines the extent to which the firms facing similar current economic and market conditions make different strategies, decisions and practices in reward systems for various occupational groups. The study was conducted in leading pharmaceutical firms, including multinational corporations and joint ventures in China. In order to provide a relatively wider picture, the differences in total rewards (financial and non-financial forms) are examined. A multi-level framework is employed in the analysis: 1) reward positioning which reflects overall approaches, values and principles that underpin reward systems; 2) reward policies which reflect the design of reward plans; 3) reward practices which demonstrate the implementation of rewards. Our findings provide some implications which may sharpen the theoretical underpinning in reward management. We reflect on the disconnection among firms’ defined strategies, intended policies and actual operations. Following this, we further question the ideology of linking rewards strategically to organisational objectives so as to sustain competitive advantage which is a central belief within strategic human resource management. Our study also provides useful insights of reward management trends for other companies which want to expand to China.

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