This study used a sample of middle-level managers to investigate the effects of organization-level agency-theory-based variables on the proportion of variable compensation that managers receive. Level of task programmability was associated with an increased use of variable pay, and long-term relationships between an agent and principal were associated with decreased use. Results supported the classical organizationtheory prediction that under higher risk, organizations use higher proportions of variable pay; but results question agency theory's ability to predict compensation strategy for middle-level managers in the high-risk situation.
ASJC Scopus subject areas
- Business and International Management
- Business, Management and Accounting(all)
- Strategy and Management
- Management of Technology and Innovation