The effects of research and development intensity on managerial compensation in large organizations

Agency theory, leading edge, and administrative/life cycle perspectives all predict that organizations having high levels of Research and Development (R&D) intensity will follow different compensation strategies than organizations that are less R&D intensive. Using data from 110 organization...

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Bibliographic Details
Published in:Journal of high technology management research 1991, Vol.2 (1), p.133-150
Main Authors: Milkovich, George T., Gerhart, Barry, Hannon, John
Format: Article
Language:English
Subjects:
Agencies
Compensation
Managers
Organizational Structure
Research And Development
Salaries
Theoretical Problems
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Summary:Agency theory, leading edge, and administrative/life cycle perspectives all predict that organizations having high levels of Research and Development (R&D) intensity will follow different compensation strategies than organizations that are less R&D intensive. Using data from 110 organizations over a 5 year period, and controlling for organization differences in employee and job characteristics, we found support for this general prediction. Specifically, high R&D intensity organizations tended to have higher relative base pay, higher relative bonus pay, and greater relative eligibility for long-term incentive payments. We discuss the importance of further research into compensation decisions in R&D intensive firms, particularly the effects of such decisions on firms' competitiveness.
ISSN:1047-8310
1879-1638
DOI:10.1016/1047-8310(91)90018-J