The Reality of Strategic Pay in Practice

Abstract

Responding to a need to improve understanding of strategic pay in practice, this study has presented findings on the pay practices of leading companies that challenge the strategic status of pay. All of the case study companies aspire to use pay strategically in line with prescriptions of standard theory, and all largely select the same configurations of ‘best practice’ pay systems on that basis. However, the findings also demonstrate that all of the case study firms experience significant managerial difficulties when attempting to ‘operationalize’ these pay systems.