* Academy of Management Review
2000, Vol. 25. No. 4, 864-872.
NOTE
GROUP PAY-FOR-PERFORMANCE PLANS:
THE ROLE OF SPONTANEOUS GOAL SETTING
ELAINE C. HOLLENSBE
JAMES P. GUTHRIE
University of Kansas
Despite the increasing popularity of group pay-for-performance plans, relatively little
theory exists regarding the dynamics of these plans. We integrate goal setting, pay
plan characteristics, and group factors to explain and predict the effectiveness of
what we call "open-goal" group pay plans. We introduce spontaneous goal setting as
a process explanation and propose antecedents that affect a group's propensity to set
goals, the goal level chosen, and goal commitment. Finally, we discuss implications
of our propositions for future research.
Many firms have implemented group-based
pay-for-performance plans—a trend that is
likely to continue (Flannery, Hofrichter, & Platten, 1996). In a recent survey Gross (1995) found
that 51 percent of companies either had group
pay programs or were considering instituting
them. This trend is supported by impressive
results, including increased productivity (Hansen, 1997; Kaufman, 1992), teamwork (Hatcher
& Ross, 1991), pay satisfaction (Welbourne &
Cable, 1995), group communication (Hanlon &
Taylor, 1991), and decreases in grievances
(Hatcher & Ross, 1991) and monitoring costs
(Cooke, 1994). Group pay plans take on many
names and forms, including profit sharing,
gainsharing, team incentives, goal sharing,
achievement sharing, winsharing, and results
sharing (Belcher, 1996; Lissy, 1993; McNutt,
1990; Schuster & Zingheim, 1993).
The defining characteristic of group pay-forperformance plans is that compensation varies
as a function of performance achieved by a
group of employees. As we define it, a "group of
employees" consists of any number of individuals engaged in interdependent work for interdependent rewards. In practice, groups under pay
plans vary from small to plant wide, with the
latter often comprising multiple, interdependent
subgroups. Although much is known about how
group pay plans are structured, little is known
about how and why they are successful (Hatcher
& Ross, 1991). As put succinctly by authors of a
recent review, current practice regarding group
rewards has "moved ahead of its basis in empirical research" (DeMatteo, Eby, & Sundstrom,
1998: 142).
In previous work authors have linked specific
group pay plans to motivational theories (see
Welbourne & Gomez-Mejia, 1995, for a review),
identity theory (Welbourne & Cable, 1995),
equity (Cooper, Dyck, & Frohlich, 1992), agency
theory/organizational justice (Welbourne,
Balkin, & Gomez-Mejia, 1995), and Deutsch's theory of cooperation (DeMatteo et al., 1998; Hatcher
& Ross, 1991). However, although researchers
have recently begun to study the linkages
among individual incentives, goal setting (e.g..
Lee, Locke, & Phan, 1997), and behavioral choice
(e.g., Sundby, Dickinson, & Michael, 1996), no
authors have examined possible linkages between group pay plans and goal setting. We
delineate why and how goal setting offers an
explanation for the effectiveness of group pay
plans, as well as insight into areas for future
research.
As explained below, for some forms of group
pay plans—those in which predetermined goals
are specified—the role of goal setting is fairly
intuitive. However, even when group pay plans
have no predetermined goals or targets, we
believe goals and goal setting still play a vital
We presented an earlier version of this work at the 1999
annual meeting of the Academy of Management in Chicago.
We thank two anonymous reviewers for their many useful
comments and suggestions.
864
2000
HoUensbe and Guthrie
role. A principal proposal is that in these latter
plans, referred to here as "open-goal" plans, the
promise of rewards motivates group members to
specify and pursue challenging performance
goals, even when none formally exists. Borrowing from Locke and Latham (1990), we describe
this behavior as "spontaneous" goal setting,
and consistent with Locke and Latham (1990), we
conceptualize spontaneous goal setting as a
process in which goals are set not as part of a
pay plan architecture but, rather, by group members stimulated by the prospect of financial rewards.
The particular focus of this work is specifying
the role of spontaneous goal setting in opengoal plans. We begin by presenting a brief treatment of goal-setting theory as applied to group
settings. This is followed by a general description of group pay-for-performance plans. We
then develop propositions relating group factors
and group pay plan characteristics to goal setting within groups.
865
and commitment and do not restate them here.
Rather, we hope to move beyond standard goalsetting propositions in examining group payfor-performance plans using a goal-setting
framework.
GROUP-BASED PAY-FOR-PERFORMANCE
PLANS
In some pay-for-performance plans both the
reward structure and the performance goals are
specified prior to performance. Goal-sharing
pay plans are a prototypical example (Belcher,
1996). In goal sharing, goals are established for
each performance metric in the plan, and group
members receive the associated bonus if the
goal is achieved. Along with goals, bonus
amounts are specified in advance so that employees understand what they will receive for
goal achievement. With bonuses yoked to specific targets, employee groups are motivated to
perform to the target. As Belcher states, "In essence, the message sent by the goal-sharing
plan is, 'If you achieve this goal, you will receive
GOAL-SETTING THEORY AS APPLIED TO
this amount of money'" (1996: 71).
GROUP SETTINGS
Although it has not been applied in prior theoretical or empirical treatments of group-based
Goals affect performance by directing attenpay plans, goal-setting theory has a relatively
tion and action, mobilizing effort, and motivatstraightforward application in group pay plans,
ing individuals to develop goal-attainment
strategies (Locke, Shaw, Saari, & Latham, 1981). such as goal sharing, in which predetermined
targets or goals exist. That is, prescriptions reIn groups goals likely cause members to work
garding the architecture and effects of predeterboth "smarter and harder" in cooperative purmined-goal plans such as goal sharing emanate
suit of the goals. Locke and Latham define a
fairly directly from the goal-setting literature.
goal as "a specific standard of proficiency on a
given task, usually within a time limit" (1990: 26). When we move into the realm of open-goal
group pay plans, however, the relevance of
"Goal difficulty" specifies a particular level of
goal-setting theory requires more development
proficiency as measured against a standard.
and discussion.
Goal-setting theorists most often propose a linear relationship between goal difficulty and
In contrast with predetermined-goal pay
performance (Locke, in press; Locke & Latham,
plans such as goal sharing, open-goal plans
1990; Q'Leary-Kelly, Martocchio, & Frink, 1994); in have no performance goals per se. Instead,
cases in which subjects reach the limits of their
these plans have a pay formula that communiability with difficult goals, however, this rela- cates to plan participants how performance will
tionship levels off (Locke & Latham, 1990). Based translate into rewards. Although the incentive
on its equivalent in individuals, a group's goal
formula for groups might incorporate a "threshcommitment is its "attachment to or determinaold," this threshold, if used at all, is not a goal in
tion to reach a goal" (Locke & Latham, 1990: 125). the traditional sense. Instead, thresholds simply
Locke, Latham, and Erez (1988) identify goal
establish the minimum performance necessary
commitment as an antecedent to performance,
for groups to begin to earn bonus. As such, when
as do others (Wofford, Goodwin, & Premack,
utilized, thresholds are typically established at
1992).
fairly modest levels (Belcher, 1996; Gross, 1995).
Thus, under open-goal plans, groups are perWe accept as a given the basic tenets of goalforming, in essence, under a "do-your-best" goal
setting theory regarding goal difficulty or level
866
Academy of Management Review
situation, in that performance goals are not
specified (hence, the designation of these plans
as "open-goal"). Since goals are not part of the
plan architecture, goals come into play oniy if
groups set them spontaneously—that is, on their
own in response to financial incentives.
By way of illustration, gainsharing provides a
well-known example of an open-goal group pay
plan. Although the basic premise of gainsharing
plans consistently involves bonus payout based
on performance, plans differ in the formula used
to calculate performance gains. Typically,
however, rewards are calculated by comparing
productivity or efficiency (output versus input)
during a particular time period against a historybased standard (i.e., the threshold). A key difference between open-goal plans (such as gainsharing) and predetermined-goal plans (such as
goal sharing and its relatives) is that with the
former, reaching the threshold target does not
earn incentive money; rather, it defines the
starting point whereupon participants can begin to earn bonus money. Increased levels of
performance above the threshold result in increased levels of reward.
A specific open-goal example is the group pay
plan utilized at Nucor, a steel manufacturer,
where groups of twenty-five to forty hourly workers participate in an incentive system and receive weekly bonuses based on steel tonnage
production above a threshold. There are no
specified performance goals and no maximum;
workers earn larger bonuses based on amount
of quality steel produced (Iverson, 1993; Woker,
1998).
We believe the success of groups in open-goal
plans, such as at Nucor and other companies
(e.g., Johnson, 1996), is largely due to goal setting
in response to incentives. As such, our focus is
on "spontaneous" goal setting as a mechanism
for understanding the effectiveness of group pay
plans. Further, we propose that group and pay
plan characteristics will influence this spontaneous goal-setting process.^
' As pointed out by a reviewer, another interesting distinction across group pay-for-performance plans is whether
they are "capped" or "uncapped." Fixed pay plans, such as
goal sharing, are capped by their very nature, in that bonuses cannot exceed the amount to be paid if the plan's
goals are met (Belcher, 1996). Open-goal plans, however,
might or might not be capped. If they are capped, limits are
often invoked to act as a safeguard against flawed plan
October
INTEGRATION OF GOAL-SETTING THEORY
AND GROUP PAY PLANS
Having briefly discussed goal-setting theory
as it applies to groups and key characteristics
of group pay plans, we now integrate the two
areas and identify factors that influence spontaneous goal setting in open-goal plans. We begin
with a discussion of incentive intensity.
Group Pay Plan Incentive Intensity
The literature on incentives and goal setting
shows that much of the effect of incentives is
through their influence on goal setting. Locke et
al. (1981) suggest that rewards might affect performance by influencing three different aspects
of goal setting. First, they suggest that incentives might affect the level at which goals are
set. Second, they propose that the prospect of
monetary rewards might induce a greater degree of spontaneous goal setting. Finally, they
suggest that money might affect the degree to
which people commit to goals. We discuss incentive intensity as the payout level and frequency of a group pay plan. Plans with greater
and more frequent bonus payout have greater
incentive intensity.
Payout level. Payout level refers to the
amount an employee can earn under the group
pay plan. Although research on individual pay
plans shows that reward size is correlated
with pay satisfaction and motivation (Wagner,
Rubin, & Callahan, 1988), little research exists
on groups. In field studies of gainsharing
(Kim, 1996; Zenger & Marshall, 1995), scholars
have found that larger levels of bonuses contingent on group performance are associated
with greater performance. DeMatteo et al. propose that the payout level in team rewards
must be "a noticeable increment," and they
point to the strong need for research on the
appropriate size of rewards (1998: 155).
design or employee "windfalls" resulting from extraordinary
events with maximum payout amounts typically set fairly
high. Regardless of whether or not open-goal plans contain
caps, the more important feature is that they consistently do
not contain predetermined goals. The only goal setting that
takes place is "spontaneous": employees self-setting goals
in response to the incentive formula. Thus, caps, per se, are
not the issue; the issue is the presence (fixed goals) or
absence (open goals) of predetermined goals.
2000
HoUensbe and Guthrie
Payout frequency. Payout frequency is the frequency with which incentive pay is distributed
to group members—a feature that varies among
pay plans. For example, if they are linked to
profits, incentives are often distributed on an
annual basis. In other plans, such as gainsharing, incentives might be paid more frequently,
often on a monthly basis, although plans vary
from this standard (Lawler, 1990; Schuster &
Zingheim, 1992). In the language of expectancy
theory (Vroom, 1964), more frequent payouts and
close temporal links between behaviors and rewards will increase instrumentality beliefs. Yet,
little is known about how payout frequency interacts with other group pay plan components to
affect performance.
A primary assertion in goal-setting theory is
that incentives lead to increased performance
through increasing commitment to incentive
goals (Locke & Latham, 1990; Yukl & Latham,
1978). Riedel, Nebeker, and Cooper (1988) found
that incentive pay significantly influences individuals' tendency to commit to goals and that
the positive influence of incentives is magnified
as incentive size increases—a finding supported by Locke and Latham (1990). Similarly, we
suggest that groups will feel more commitment
to goals when the payout is greater and more
frequent.
Although extant research supports the effect
of incentive intensity on goal commitment, in it
there is an assumption that a goal has been set,
which, by definition, is not true of the reward
structure in open-goal plans. We argue that in
the absence of formally designated goals, incentives will positively influence the valence of performance outcomes, which, in turn, will affect
the propensity of groups to set goals and the
level of goals that are set. This relationship is
inferred from equivocal evidence provided by a
limited number of individual-level studies. Although in some of these studies (Terborg, 1976;
Terborg & Miller, 1978; Wright, 1990) researchers
have found no incentive-spontaneous goalsetting relationship, others have. Specifically,
Riedel et al. (1988) and Saari and Latham (as
cited in Locke & Latham, 1990) provide evidence
that incentives increase the likelihood of this
spontaneous goal setting. In addition, research
by Locke and Shaw (1984) and Riedel et al: (1988)
supports the positive effect of incentives on goal
level. In sum, what emerges from the research is
support for the following proposition.
867
Proposition 1: Incentive intensity in
open-goal group pay plans will aiiect
spontaneous goal setting and goal
commitment.
Groups ieceiving
a
laigei poition oi theii pay contingent
on peiioimance and moie iiequent
payouts will display a gieatei piopensity to set goals spontaneously, will
set more diiiicult or chaJJenging
goals, and will be more committed to
the goals they set.
Group-Level Influences
We propose several group-level influences on
goal setting and goal commitment in a group
pay environment, including collective (group)
efficacy, group size, interdependence, and group
performance norms.
Collective (group) efficacy. Collective efficacy
is a group's perception of its ability to perform
successfully in a particular situation (Durham,
Knight, & Locke, 1997; Prussia & Kinicki, 1996).
Many authors have documented the importance
of efficacy in achieving performance (Durham et
al., 1997; Gist, Schwoerer, & Rosen, 1989; Prussia
& Kinicki, 1996), as well as the effects of performance on subsequent efficacy (Silver, Mitchell,
& Gist, 1995). Consistent with research on individual efficacy, collective efficacy should influence goal commitment.
If a group is stimulated by the prospect of
incentives, collective efficacy also might affect
the group's propensity to set goals and the
choice of goal level in open-goal plans. There is
a host of studies indicating a robust relationship
between self-efficacy and chosen goal level in
individuals (see Locke & Latham, 1990, for a review). Durham et al. (1997) extend this finding to
groups and report that team efficacy influences
team-set goal difficulty. Thus, research supports
the conclusion that efficacy levels affect goal
choice or goal level; intuitively, it seems likely
that the propensity to set goals would also be
influenced by efficacy. Groups with high levels
of collective confidence would more likely specify goals as a step toward earning incentives
(i.e., efficacy would promote spontaneous goal
setting).
Group size. Group pay plans create and depend on peer communication and prosocial behavior (Hanlon, Meyer, & Taylor, 1994); these behaviors are more likely in smaller groups.
868
Academy of Management Review
Heightened coordination demands in larger
groups (Gladstein, 1984) might diminish the time
available for cooperative maintenance work.
Further, members of small groups might have a
clearer line of sight between performance and
rewards (Vroom, 1964).
Studies show that social loafing and free
riding increase as the size of the group increases (Jackson & Harkins, 1985; Karau & Williams, 1993). This has been described as a 1/n
problem (where n = group size) in which the
direct returns to group members are diluted by a
factor of 1/n (Hansen, 1997; Kruse, 1993). As the
group grows larger, reward dilution and free
riding increase. Thus, individuals in larger
groups generally will be less committed to
group goals. In smaller groups, in which behavior can be monitored, commitment to group
goals is enhanced.
We also speculate that group size might affect
a group's propensity to set goals and the level of
goals chosen. Motivated by the prospect of earning greater rewards, smaller groups in an opengoal plan may more easily identify ways to cooperate and share information and workload.
Members of small groups also might have fewer
concerns about free riders. Thus, in contrast
with larger groups, smaller groups might engage in goal setting more often and set more
challenging goals.
Interdependence. Interdependence is a defining characteristic of groups. Three types of interdependence are relevant here—task, reward,
and goal interdependence—and they exist both
within and between groups. Changing technology and the flattening of hierarchies have contributed to greater task interdependence within
groups and between groups. The prevalence of
group pay has contributed to interdependence
in outcomes received (Wageman & Baker, 1997),
and efforts to link workgroup goals with organizational strategy (Terpstra & Rozell, 1994) depend on goal interdependence as well (Wageman, 1995).
Interdependence is functional to the extent
it relies on clear coordination of tasks and
optimal integration of the work among differentiated units (Thompson, 1967), as well as
coordination and integration of rewards and
goals within and between groups. Functional
interdependence might increase the motivational properties of the work and the efficiency
with which work is performed (Campion, Med-
October
sker, & Higgs, 1993); thus, it might also affect
a group's commitment to meeting group
pay plan goals. Alternatively, dysfunctional
interdependence might hamper group and organizational effectiveness. This might be
particularly true when between-group task interdependence and within-group reward interdependence exist, which might lead to competition between teams (DeMatteo et al., 1998;
Mohrman, Mohrman, & Lawler, 1992).
As with group efficacy and size, interdependence also might affect a group's propensity to
engage in goal setting and the level of goals
set within open-goal environments. In a functionally interdependent group, it is more likely
that the optimal coordination and integration
required to set goals exist. Tjosvold (1988)
found that collective interdependence results
in positive expectations, exchange of information and resources, productivity, cohesion, and
morale. These effects would likely prompt
groups to set challenging goals, based on the
availability of expanding group resources.
Group performance norms. Group norms are
the group's shared beliefs or the standards
that guide members' behaviors (Jehn, 1997;
Johnson & Johnson, 1991); they also indicate
what level of performance is appropriate and
possible (Locke & Latham, 1990). Group norms
are known to influence commitment to low
goals in the form of restriction of output (Roethlisberger, 1982). Alternatively, strong norms
might produce commitment to high goals
(Locke & Latham, 1990).
The effect of group norms on goal commitment might be particularly profound in opengoal plans, where no formal goals exist. As
groups under open-goal plans face nonspecific goals, group norms are more likely to
emerge to enable the group to cope with uncertainty (Schein, 1990) and to exert a greater
influence over behavior. Group norms also
might affect a group's propensity to set goals
spontaneously, as well as the level of those
goals. Groups with strong norms supporting
achievement would be more likely to specify
challenging goals. Based on this discussion of
group influences, we propose the following.
Proposition 2: Chaiacteiistics of
open-goal groups will affect spontaneous goal setting and goal commitment. Smallei groups with higher
HoUensbe and Guthrie
2000
coiiecfive efficacy, functional interdependence, and strong group performance norms will display a
greater propensity to set goals spontaneously, will set more difficult or
challenging goals, and will be more
committed to the goals they set.
Group Performance Feedback
As a final proposition, we suggest that performance feedback influences the propensity of
groups in open-goal group pay plans to set challenging goals and to remain committed to them.
Under group pay plans, performance feedback
is often available or provided separately from
actual reward distribution. For example, a running record of groups' performance might be
posted with regular updates provided. In studies
at the individual level, researchers have found
that introduction of performance feedback is
"enough to almost guarantee 'spontaneous goal
setting' " (Locke & Latham, 1990: 188). Basic reinforcement theory indicates that feedback is most
likely to influence behavior when it is provided
frequently and in temporal proximity to performance.
If we extend this finding to groups in opengoal plans, we should find that frequent, timely
performance feedback affects goal setting, with
performance feedback acting as a catalyst for
continued revision of goals oriented toward the
possibility of future rewards. Frequent, timely
knowledge of results gives group members a
standard to exceed that "could increase the valence of high or improved performance" (Locke &
Latham, 1990: 122) and leads groups in opengoal pay environments to set higher goals. As
an extension of goal-setting research, we propose the following.
Proposition 3: Performance feedback
in open-goal groups will affect spontaneous goal setting and goal commitment. Groups receiving
frequent,
timely feedback will display a greater
propensity to set goals spontaneously,
will set more difficult or challenging
goals, and will be more committed to
the goals they set.
869
IMPLICATIONS FOR THEORY DEVELOPMENT:
TOWARD A RESEARCH AGENDA
We have presented spontaneous goal setting
as a process explanation for the effectiveness of
open-goal group pay plans. Portions of our argument are grounded in extant research, but
other aspects suggest avenues for future empirical examination. In open-goal plans specific
performance targets are not paired with incentives; instead, workgroups find themselves in
essentially a "do-your-best" goal situation. A
long line of goal-setting research pieces on individuals strongly suggests that "do-your-best"
goals are less effective in raising performance
than are specific, challenging goals. Our propositions help explain the apparent contradiction
between the effective practice of using opengoal pay plans (e.g., in firms such as Nucor) and
research supporting the inferiority of openended goals. We suggest the apparent contradiction is illusory in that intense incentives,
when paired with particular group characteristics, will stimulate groups to formulate ambitious performance goals. Our propositions offer
guidance on conditions associated with successful open-goal pay plans, but they also raise
many issues.
For example, we offer spontaneous goal setting as a process mechanism underlying the
success of open-goal group pay plans. We outline antecedents in open-goal environments
that might lead groups to spontaneously set
challenging goals and remain committed to
them. As with most theoretical propositions,
ours are speculative and suggest questions for
future research. For example, how exactly do
groups in open-goal pay plans engage in spontaneous goal setting? Moreover, how is "group
goal setting" defined? What role do individual
differences, such as personality, play in group
goal setting? Are extrinsically motivated individuals (Amabile, Hill, Hennessey, & Tighe,
1994) more likely to promote group goal setting
in the context of incentives?
Although incentives might magnify a group's
propensity to set goals, a more fundamental explanation for the emergence of spontaneous
goal setting in groups might lie in the ambiguity
that exists in groups about the definition of acceptable performance. This ambiguity is partly
a function of the multiplicity of possible goals in
a group. According to Zander (1980), four types of
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Academy of Management Review
goals can exist in groups: each member's goal
for the group, each member's goal for himself or
herself, the group's goal for each member, and
the group's goal for itself. With no predetermined goals, groups in open-goal plans might
set goals spontaneously to allay ambiguity
about appropriate performance. As we suggest,
this might be particularly true in groups that are
small, efficacious, functionally interdependent,
and strongly normative. Additionally, when
more pay is at risk, payouts are frequent, and
knowledge of results is timely, conditions are
ripe for a goal-setting response.
The question of how groups generate goals
when none exists also poses possibilities for
research. Essentially, goal generation requires
decision making to determine future performance targets. Bayesian analysis indicates that
in conditions in which several courses of action
are possible and a risk-filled set of future possibilities exists, decision making occurs recursively (Schmidt & Hunter, 1977; Svyantek,
O'Connell, & Baumgardner, 1992). Under these
conditions, a group uses prior information to
assess the effects of a current decision. This
prior information might be based on accumulated knowledge of past performance or on the
intuition of experts, and it is constantly revised
based on data accumulated over a series of performance trials (Svyantek et al., 1992).
If we apply this analytic approach to opengoal group pay .plans, we can draw parallels
that might help elucidate how groups generate
goals. For example, under open-goal pay plans,
conditions exist in which several performance
levels are possible, multiple types of possible
goals exist, and the design of the reward system
entails a set of future possibilities that is risk
filled. Knowledge of results or feedback, as well
as the intuition of group members, serves as
prior information in group pay plans. When
timely, frequent feedback is provided and payout entails higher risk and more frequent return,
groups have the tools and motivation to recursively and consensually assess and reassess
their performance. Thus, groups can continue to
engage in "spontaneous" goal setting: setting
and revising goals for future performance based
on these assessments. Unlike in group pay
plans in which goals are predetermined, static,
and less susceptible to feedback, in open-goal
pay plans goals are emergent, dynamic, and
highly susceptible to feedback. The latter condi-
Qctober
tions might allow for Bayesian revision making
of goals in a much more dynamic and complex
goal-setting process.
Research is also needed to help clarify the
contours of the group goal-setting construct itself. It is unclear, for example, if a goal is set
when specific performance targets are cognitively assessed by individual group members or
only when a goal is discussed and agreed to by
all members. Even more so than at the individual level, group goal setting is complex—
perhaps best represented as a continuum ranging from cognitions to discussions and, finally,
to group agreements on performance goals. Incentive intensity and group characteristics
might play a role, in determining a group's location on this continuum. The specific nature of the
relationship between incentive intensity and
propensity to set goals and goal commitment
requires investigation. For example, is the relationship linear or, similar to merit pay increases
(Mitra, Gupta, & Jenkins, 1995), is there a critical level that must be exceeded before
a reward is viewed as meaningful and, thus, a
catalyst for groups to engage in goal setting?
Answering questions proposed here is fundamental to understanding the dynamics of group
pay plans and providing guidance for compensation practice.
In conclusion, we believe that spontaneous
goal setting offers a robust explanation for
group pay plans and provides insight into areas
for future research. The propositions we outline
contribute a vital first step to understanding the
complex environment in which group pay plans
operate. In addition, they stimulate interesting
theoretical and practical questions and provide
a starting point for further empirical work on
refining and more closely specifying proposed
relationships.
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Elaine C. HoUensbe is a doctoral candidate in organizational behavior and human
resource management at the University of Kansas. Her research interests include
motivational aspects of compensation, self-efficacy, identity, and emotion management.
James P. Guthrie is the Charles W. Qswald Faculty Fellow and an associate professor
in the School of Business at the University of Kansas. He received his Ph.D. in human
resource management from the University of Maryland. His current research interests
focus on reward systems and the relationship between human resource management
practices and firm effectiveness.