Strategic Alignment: Linking Employee Compensation with Organizational Sustainability

Expanding upon existing research on compensation, this study delves into the intricate connections among employee competencies, corporate cultures, and compensation strategies. These strategies, often discussed in literature pertaining to the implementation of pay-for-performance (PFP) systems or the challenges leading to their failure, have been underrepresented in research directed towards HR education practitioners. This study fills this gap by shedding light on which organizational factors are crucial in determining the suitability of PFP or alternative compensation programs. Drawing upon data gathered from 385 employees in the American manufacturing sector, the findings reveal statistically significant relationships between employee competencies and organizational cultures. These findings align with previous research, underscoring the linkages between compensation schemes, various organizational competencies, and diverse organizational cultures, thereby enriching the existing literature on the subject.