Strategic Compensation for Integrated Manufacturing: The Moderating Effects of Jobs and Organizational Inertia

Abstract

Theorists suggest that integrated manufacturing requires a compensation strategy that reinforces collective effort, professionalism, and flexibility. But several aspects of job design and organizational characteristics may mitigate a direct manufacturing-compensation relationship. Results of this study show virtually no direct effects of advanced technology, just-in-time inventory control, and total quality management on compensation practices. However, when integrated manufacturing is coupled with job characteristics that signal “knowledge work,” compensation systems tend to emphasize group-based incentives, salary, and seniority-based pay. Sources of organizational inertia moderate these relationships.