Reference compensation: A transfer of reference price theory to human resource management

F.U. Siems; H. Goelzner; D.C. Moosmayer

doi:10.1007/s11846-010-0055-0

Reference compensation: A transfer of reference price theory to human resource management

F.U. Siems
, H. Goelzner
, D.C. Moosmayer

Research Group for Management and Business-to-Business Marketing, RWTH Aachen University

Research output: Contribution to journal › Article › peer-review

Abstract

The topics of compensation in human resource management and pricing in marketing theory both involve a monetary component that is important for companies to manage. While the role that price perceptions play for consumers is the subject of the well-established reference price theory, human resource management theory lacks any related concept for the compensation perceptions held by employees. This paper transfers reference price theory to HR management in the form of reference compensation, conceptualized as an individual's compensation norm, including normative and predictive compensation expectations. Possible measures to influence employees' reference compensation are suggested and avenues for further establishing the concepts in research and practice are developed. As a first empirical attempt to support the relevance of the concept, we present results of an exploratory study among 88 part-time students. We show that employees apply references when judging compensation, and that the applied references vary with different employment situations. © 2010 Springer-Verlag.

Original language	English
Pages (from-to)	103-129
Number of pages	27
Journal	Review of Managerial Science
Volume	6
Issue number	2
DOIs	https://doi.org/10.1007/s11846-010-0055-0
Publication status	Published - 2012

Keywords

Compensation satisfaction
Exploratory study
Reference compensation
Reference price

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10.1007/s11846-010-0055-0

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Cite this

@article{d26161eaaa6d4f55951e9cfb51c19486,

title = "Reference compensation: A transfer of reference price theory to human resource management",

abstract = "The topics of compensation in human resource management and pricing in marketing theory both involve a monetary component that is important for companies to manage. While the role that price perceptions play for consumers is the subject of the well-established reference price theory, human resource management theory lacks any related concept for the compensation perceptions held by employees. This paper transfers reference price theory to HR management in the form of reference compensation, conceptualized as an individual's compensation norm, including normative and predictive compensation expectations. Possible measures to influence employees' reference compensation are suggested and avenues for further establishing the concepts in research and practice are developed. As a first empirical attempt to support the relevance of the concept, we present results of an exploratory study among 88 part-time students. We show that employees apply references when judging compensation, and that the applied references vary with different employment situations. {\textcopyright} 2010 Springer-Verlag.",

keywords = "Compensation satisfaction, Exploratory study, Reference compensation, Reference price",

author = "F.U. Siems and H. Goelzner and D.C. Moosmayer",

note = "Cited By :5 Export Date: 14 December 2023 Correspondence Address: Moosmayer, D. C.; Research Group for Management and Business-to-Business Marketing, , 52056 Aachen, Germany; email: [email protected] References: Adlwarth, W., Twardawa, W., (2010) Marktanalysen 2010: Trendwende Bei Discount, Handelsmarken, Mittemarken-Wie Nachhaltig Ist Diese Entwicklung?, , Nuernberg: GfK; Aggarwal, R.K., Samwick, A.A., Performance incentives within firms: The effect of managerial responsibility (2003) J Finance, 58 (4), pp. 1613-1649; Akerlof, G.A., The case against conservative macroeconomics: An inaugural lecture (1979) Economica, 46 (3), pp. 219-237; Alba, J.W., Mela, C.F., Shimp, T.A., Urbany, J.E., The effect of discount frequency and depth on consumer price judgments (1999) J Consum Res, 26 (2), pp. 99-114; Aryee, S., Budhwar, P.S., Chen, Z.X., Trust as a mediator of the relationship between organizational justice and work outcomes: Test of a social exchange model (2002) J Org Behav, 23 (3), pp. 267-285; Barber, A.E., Roehling, M.V., Job posting and the decision to interview: A verbal protocol analysis (1993) J Appl Psychol, 78 (5), pp. 845-856; Bayo-Moriones, A., Larraza-Kintana, M., Profit-sharing plans and affective commitment: Does the context matter? (2009) Hum Resour Manag, 48 (2), pp. 207-226; Bell, D.R., Bucklin, R.E., The role of internal reference price in the category purchase decision (1999) J Consum Res, 26 (2), pp. 128-143; Berkowitz, E.N., Walton, J.R., Contextual influences on consumer price responses: An experimental analysis (1980) J Market Res, 17 (3), pp. 349-359; Biswas, A., Blair, E.A., Contextual effects of reference price in retail advertisement (1991) J Market, 55 (3), pp. 1-12; Blanchard, O., (2008) Macroeconomics, , 5th Int'l Ed, London: Prentice-Hall; Blechar, J., Constantiou, I., Damsgaard, J., Exploring the influence of reference situations and reference pricing on mobile service user behaviour (2006) Eur J Inf Sys, 15 (3), pp. 285-291; Bolton, L.E., Warlop, L., Alba, J.W., Consumer perceptions of price (Un)fairness (2003) J Consum Res, 29 (4), pp. 474-491; Bozionelos, N., Expatriation outside the boundaries of the multinational corporation: A study with expatriate nurses in Saudi Arabia (2009) Hum Resour Manag, 48 (1), pp. 111-134; Breaugh, J.A., Billings, R.S., The realistic job preview: Five key elements and their importance for research and practice (1988) J Bus Psychol, 2 (4), pp. 291-305; Breaugh, J.A., Starke, M., Research on employee recruitment: So many studies, so many remaining questions (2000) J Manag, 26 (3), pp. 405-434; Bridges, E., Yim, C.K., Briesch, R.A., A high-tech product market share model with customer expectations (1995) Market Sci, 14 (1), pp. 61-81; Briesch, R.A., Krishnamurthi, L., Mazumdar, T., Raj, S.P., A comparative analysis of reference price models (1997) J Consum Res, 24 (2), pp. 202-214; Brucks, M., Zeithaml, V., Naylor, G., Price and brand name as indicators of quality dimensions for consumer durables (2000) J Acad Market Sci, 28 (3), pp. 359-374; Brumback, G.B., Pay without performance: The unfulfilled promise of executive compensation (2006) Pers Psych, 59 (4), pp. 975-979; Calder, B., Phillips, L., Tybout, A., Designing research for application (1981) J Consum Res, 8 (2), pp. 197-207; Campbell, M., Perceptions of price unfairness: Antecedents and consequences (1999) J Market Res, 36 (2), pp. 187-199; Certo, S.T., Daily, C.M., Cannella, A.A., Dalton, D.R., Giving money to get money: How CEO stock options and CEO equity enhance IPO valuations (2003) Acad Manag J, 46 (5), pp. 643-653; Chow, I.H., Huang, J.-C., Liu, S., Strategic HRM in China: Configurations and competitive advantage (2008) Hum Resour Manag, 47 (4), pp. 687-706; Churchill, G.A., Surprenant, C., An investigation into the determinants of customer satisfaction (1982) J Market Res, 19 (4), pp. 491-504; Cohen, R.J., What qualitative research can be (1999) Psychol Market, 16 (4), pp. 351-368; Connell, J., Ferres, N., Travaglione, T., Engendering trust in management-subordinate relationships: Predictors and outcomes (2003) Pers Rev, 32 (5), pp. 569-589; Dahl{\'e}n, P., Bolmsj{\"o}, G.S., Life-cycle cost analysis of the labor factor (1996) Int J Prod Econ, 46-47 (1), pp. 459-467; Darby, M., Karni, E., Free competition and the optimal amount of fraud (1973) J Law Econ, 16 (1), pp. 67-88; Davis, K.R., Giles, W.F., Feild, H.S., What college graduates want in a compensation package (1985) Compens Rev, 17 (1), pp. 42-53; Davis, K.R., Giles, W.F., Feild, H.S., Opting for benefits: Do job-hunting college seniors envision more money or more benefits? 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year = "2012",

doi = "10.1007/s11846-010-0055-0",

language = "English",

volume = "6",

pages = "103--129",

journal = "Review of Managerial Science",

issn = "1863-6683",

publisher = "Springer Verlag",

number = "2",

}

TY - JOUR

T1 - Reference compensation: A transfer of reference price theory to human resource management

AU - Siems, F.U.

AU - Goelzner, H.

AU - Moosmayer, D.C.

N1 - Cited By :5 Export Date: 14 December 2023 Correspondence Address: Moosmayer, D. C.; Research Group for Management and Business-to-Business Marketing, , 52056 Aachen, Germany; email: [email protected] References: Adlwarth, W., Twardawa, W., (2010) Marktanalysen 2010: Trendwende Bei Discount, Handelsmarken, Mittemarken-Wie Nachhaltig Ist Diese Entwicklung?, , Nuernberg: GfK; Aggarwal, R.K., Samwick, A.A., Performance incentives within firms: The effect of managerial responsibility (2003) J Finance, 58 (4), pp. 1613-1649; Akerlof, G.A., The case against conservative macroeconomics: An inaugural lecture (1979) Economica, 46 (3), pp. 219-237; Alba, J.W., Mela, C.F., Shimp, T.A., Urbany, J.E., The effect of discount frequency and depth on consumer price judgments (1999) J Consum Res, 26 (2), pp. 99-114; Aryee, S., Budhwar, P.S., Chen, Z.X., Trust as a mediator of the relationship between organizational justice and work outcomes: Test of a social exchange model (2002) J Org Behav, 23 (3), pp. 267-285; Barber, A.E., Roehling, M.V., Job posting and the decision to interview: A verbal protocol analysis (1993) J Appl Psychol, 78 (5), pp. 845-856; Bayo-Moriones, A., Larraza-Kintana, M., Profit-sharing plans and affective commitment: Does the context matter? 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PY - 2012

Y1 - 2012

N2 - The topics of compensation in human resource management and pricing in marketing theory both involve a monetary component that is important for companies to manage. While the role that price perceptions play for consumers is the subject of the well-established reference price theory, human resource management theory lacks any related concept for the compensation perceptions held by employees. This paper transfers reference price theory to HR management in the form of reference compensation, conceptualized as an individual's compensation norm, including normative and predictive compensation expectations. Possible measures to influence employees' reference compensation are suggested and avenues for further establishing the concepts in research and practice are developed. As a first empirical attempt to support the relevance of the concept, we present results of an exploratory study among 88 part-time students. We show that employees apply references when judging compensation, and that the applied references vary with different employment situations. © 2010 Springer-Verlag.

AB - The topics of compensation in human resource management and pricing in marketing theory both involve a monetary component that is important for companies to manage. While the role that price perceptions play for consumers is the subject of the well-established reference price theory, human resource management theory lacks any related concept for the compensation perceptions held by employees. This paper transfers reference price theory to HR management in the form of reference compensation, conceptualized as an individual's compensation norm, including normative and predictive compensation expectations. Possible measures to influence employees' reference compensation are suggested and avenues for further establishing the concepts in research and practice are developed. As a first empirical attempt to support the relevance of the concept, we present results of an exploratory study among 88 part-time students. We show that employees apply references when judging compensation, and that the applied references vary with different employment situations. © 2010 Springer-Verlag.

KW - Compensation satisfaction

KW - Exploratory study

KW - Reference compensation

KW - Reference price

U2 - 10.1007/s11846-010-0055-0

DO - 10.1007/s11846-010-0055-0

M3 - Article

SN - 1863-6683

VL - 6

SP - 103

EP - 129

JO - Review of Managerial Science

JF - Review of Managerial Science

IS - 2

ER -

Reference compensation: A transfer of reference price theory to human resource management

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