Organizational rewards for a changing workplace: An examination of theory and practice

In response to a rapidly changing business environment, organizations are attempting to implement fundamental changes in how they structure and manage themselves. The current academic and applied literature highlights various initiatives being employed by organizations in their change efforts. These include: total quality management, re-engineering, de-layering, downsizing, employee empowerment, teamwork, and customer service. However, empirical evidence suggests that some organizations are more successful than others in initiating and sustaining meaningful change. One potential explanation for such variations lies in the manner in which organizations reward their employees. Some organizations, realizing that the reward systems should be congruent with organizational strategy, have begun moving away from traditional reward systems and are increasingly adopting new pay and reward strategies. In this study, we review the relevant theoretical and empirical literature and examine the reward strategies of two companies trying to grapple with organizational change.