Management Compensation, Rewards, Remuneration
Xiang Zhou, Jason D. Shaw
  • LAST REVIEWED: 14 December 2022
  • LAST MODIFIED: 27 February 2019
  • DOI: 10.1093/obo/9780199846740-0156


Employee compensation costs organizations about 70 percent of their average total costs (see Overview), so practitioners and scholars are constantly searching for the more effective programs among various compensation schemes. Compensation and pay plans are developed and implemented based on cultural norms and preferences but also subject to legislation. The dimensions of compensation systems include, but are not limited to, base pay, individual incentives, deferred pay, and team- and organization-based pay. The articles cited focus on recent pay-related theories regarding antecedents and outcomes of pay levels, pay changes, pay structures, and pay administrations.


Shaw 2006 indicates that compensation is positively related to performance because pay incentivizes effort and has sorting effects by attracting high-quality applicants. In meta-analysis, Williams, et al. 2007 reveals that pay levels and pay raises are positively related to organizational commitment, satisfaction with work, and agreement with promotions. Conroy, et al. 2015 briefly reviews compensation literature and suggests areas for future compensation research. Fay 2016 discusses non-cash compensation benefits.

  • Conroy, S. A., Y. J. Yoon, P. A. Bamberger, et al. “Past, Present and Future Compensation Research Perspectives.” Compensation & Benefits Review 47.5–6 (2015): 207–215.

    Summarizes the compensation literature, comments on the future of compensation research, discusses the bridging of micro and macro perspectives, and challenges common assumptions about compensation.

  • Fay, Charles. “Benefits.” In Oxford Bibliographies. New York: Oxford University Press, 2016.

    Reviews benefits such as retirement, health care, and income protection programs.

  • Shaw, J. D. “Compensation.” In Encyclopedia of Career Development. Edited by Jeffrey H. Greenhaus and Gerard A. Callanan, 188–191. Thousand Oaks, CA: SAGE, 2006.

    Reviews base pay levels, variable pay, incentive plans, and pay structures.

  • U.S. Bureau of Labor Statistics. Employer Costs for Employee Compensation. Washington, DC: U.S. Bureau of Labor Statistics, 2016.

    An annual report on the average costs of total compensation, wages, and salaries. Total benefits arranged by sectors, industries, occupations, census regions, and employment sizes.

  • Williams, M. L., M. A. McDaniel, and L. R. Ford. “Understanding Multiple Dimensions of Compensation Satisfaction.” Journal of Business and Psychology 21.3 (2007): 429–459.

    A meta-analysis on four dimensions of compensation satisfaction. Pay levels and pay raise are shown to be positively related to various positive work attitudes.

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