Performance-based pay, procedural justice and job performance for R&D professionals: evidence from the Taiwanese high-tech sector

Abstract

The aim of this contribution is to examine the effectiveness of performance-based pay by discussing the relationship between performance-based pay and job performance in a HRM context. Because any compensation agreement must be based on organizational justice and, as it is interfered with by cultural attributes, we also examined how and to what degree perceived procedural justice affects the effectiveness of performance-based pay by using both the research results in non-Confucian-influenced societies and the possible guidelines of organizational justice in a non-influenced societies. In our sample of 258 R&D professionals in Taiwanese high-tech organizations, we found that performance-based pay could be positively related to job performance. In addition, this study also provided evidence that procedural justice is positively related to task performance and moderated the relationship between performance-based pay and job performance. We identify HRM implications for applying our findings in organizational settings and also in benefiting future research on the effects of procedural justice in the employee–organization exchange relationship.

Keywords:

• high-tech organizations
• job performance
• performance-based pay
• procedural justice
• R&D professionals
• Taiwan

Acknowledgement

This research was supported by NSC R.O.C. under the contract number (NSC 095-2917-I-110-005).

Notes

1. It means that R&D professionals have high autonomy, interdependence, and highly specialized knowledge which leads to their requisite behaviour and, therefore, cannot be precisely defined.

2. Technical core is the process by which raw materials are converted into the products in which organizations specialize.