Source and Title: Compensation Strategy and Work Performance Configurational Perspective By Tzu-Jung and Huang Subject: The

e study aims at empirically testing the strategic impact of compensation strategy on firm performance. By taking a configurational perspective, the existence of ideal type of compensation strategy and its influence on work performance is examined. Model and Issues: Firstly, it is examined whether the similarity of a firms actual compensation strategy to ideal one will have a positive impact on the firm performance. Secondly, it is studied whether the similarity of a firms actual compensation strategy to the ideal-type one that is most appropriate to its corporate strategy will lead to better firm performance. The third objective of this study is the investigation the ideal-fit between compensation strategy and corporate structure. The investigation of the ideal-fit of compensation strategy and corporate culture and its influence on firm performance is the fourth objective of this study The fifth and the last objective of this study aims at investigating the relationship of the ideal-fit of compensation strategy and core competence

The first chapter begins with an introduction of the different issues presented. The second chapter begins with a reviewing of relevant literatures. We look over studies related to three major topics: Strategic compensation, configurational theory, and the relationship between strategic compensation and firm performance In the second section, we construct the ideal-types of each variable on the basis of the typologies adopted respectively. There are five major hypotheses included in this study. The first hypothesis tests the ideal-type argument of the configurational perspective. The following four hypotheses examine the contingent argument of the configurational perspective:

Hypothesis 1: The closer a firms compensation system resembles the ideal compensation system, the better its general performance will be. Hypothesis 2: The closer a firms compensation system resembles the ideal compensation system that is congruent with its corporate strategy, the better its general performance will be.

Hypothesis 3: The closer a firms compensation system resembles the ideal compensation system that is congruent with its corporate structure, the better its general performance will be. Hypothesis 4: The closer a firms compensation system resembles the ideal compensation system that is congruent with its corporate culture the better its general performance will be. Hypothesis 5: The closer a firms compensation system resembles the ideal compensation system that is congruent with its corporate core competence, the better its general performance will be. Conclusion and Summary: The major purpose of this research was to explore empirically the strategic impact of compensation to firm performance by taking a configurational perspective, which is less approached in past studies. Through adding more contingency factors, we also tried to enrich the construct of the contingent configurational perspective. Further Research Suggestions: Some suggestions for future researches on strategic compensation and configurational perspective are presented. First, as indicated in the previous section, future research can better generalize the research results by classifying industry types. Furthermore, the classification of industry types should be given in a meaningful number instead of just coding. For example, the industry can be ordered in the extent of the use of technology. By coding with the extent of high-tech usage, a significant higher coefficient of firm industry can be explained as that the usage of technology have a positive impact on compensation strategy and the other variables alike.