Individual pay for performance and commitment HR practices in South Korea

Chang, Eunmi
December 2006
Journal of World Business;Dec2006, Vol. 41 Issue 4, p368
Academic Journal
Abstract: Despite the rapid growth of the use of pay-for-individual-performance systems in collectivistic societies including Korea, there are very few empirical studies regarding their effects on employee attitudes. With a data-set of 37 companies and 959 employees from South Korea, this research examines whether the new compensation system influences Korean employees� organizational commitment and work effort and how these effects are moderated by HR practices. Using Hierarchical Linear Modeling, we found that pay-for-individual performance and commitment to HR practices did not have effects on organizational commitment, but a positive interaction effect was found. Regarding work effort, positive effects of pay-for-individual performance and the commitment HR were found as well as a significant interaction effect between them. Implications of the results are included.


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