Contributing to Theory

Contributing to Theory

The identification of variables in a quantitative study that literature on topic suggests may   mediate, cause an action or moderate a known relationship between a cause and effect.  There are various variables in a study topic, which contributes to a theory, and these include, independent, dependent, mediating and moderating variables among others.  An independent variable is the variable that a researcher has control over and can be manipulated, dependent variable is the variable that is measured and is what is affected during an experiment. A moderator variable influences the strength of a relationship between two other variables while mediating variable on the other hand explains relationships that exist between two other variables. This discussion investigates moderating, mediating independent and dependent variable in five articles with the aim of identifying how they contribute to theory.

The research topic that guides this discussion is how pay affects or impacts on employee performance.

Trevor, C., Reilly, G., &  Gerhart, B. (2012). Reconsidering Pay Dispersion’s Effect on the Performance of Interdependent Work: Reconciling Sorting and Pay Inequality, Academy of Management Journal, 55(3): 585-610.

In the article, “Reconsidering Pay Dispersion’s Effect on the Performance of Interdependent Work: Reconciling Sorting and Pay Inequality” the researchers explores the theory about the impact of pay on the performance of employees in interdependent work settings.  The key constructs are the dispersion effects and the interdependent work setting. They are related in the sense that changes in one causes alteration of another.  There is also cause and effect in the sense that when there is Pay dispersion it impacts on the individuals as well as on the organization. Moderating variables include retention and attraction as they are adopted to help in understanding the relationships between Pay dispersion used to secure employee inputs and pay dispersion that is not used. They are operationalised before they are measured.

The study took a quantitative approach as the researchers sought to test various hypotheses related to the study topic.  They used four hypotheses that related to the topic of study. The methodology adopted to collect for data was surveys. The researchers collected their data from a NHL websites and as well as from annual editions of the NHL official guide and record book. The data used was on pay and performance of the team beginning from 1998 to 2008.  A total of 2011 teams were analyzed.  Various statistics methods were used to analyze the data.  They include random and fixed effects models, Cameron and Trivedi regression based tests, mediation and moderation effects and generated regressors.

Because of the various hypotheses, the findings were diverse. One of the findings was that dispersion explained pay attracted and led to retention of the productivity relevant inputs, which eventually facilitated team performance. Furthermore, dispersion explained pay through sorting   led to more effective team performance and yielded more favorable effects compared to dispersion unexplained pay.  Control for pay level strategy, pay for performance strategy and productivity relevant inputs eliminated the positive pay dispersion effects on the performance of the teams’ performance. Consequently, these conclusions and findings indicate or prove the fact that in need there is some correlation between pay increase and performance of the workers.  When employees feel that they are well paid, their level of performance is likely to increase and vice versa.

Engellandt, A., & Riphahn, R. (2011).  Evidence on incentive effects of subjective performance evaluations, Industrial & Labor Relations Review, 64(2): 241-257.

The researchers explore the theory on pay and their impacts in terms of increasing employee efforts.  They achieve this by using key constructs in their theory, which are two performance based remuneration mechanisms, namely the surprise bonus and one, which is affected by the extent to which an employee has reached personalized targets.  These constructs are operationalised before they are measured.  The cause and effects adopted in this study is the kind of payment scheme and the level of efforts.  Mediating and moderating variables are the remuneration mechanisms and the flexibility of the remuneration mechanisms. The study took a quantitative approach as various hypotheses were tested. Data was taken from a panel of 4080 employees in the Swiss unit of an international company for duration of four years from 1999 to 2002.  The two hypotheses tested used was paid and unpaid overtime work indicators. Data was analyzed using statistical method. The findings  of the study revealed that  effort was higher  in departments that  individual performance  evaluations  are flexible over time  and when  surprise bonus are used more frequently. These findings also help to contribute to the theory that indeed, employees are more motivated and would increase their efforts when bonuses are more flexible.

Chang, E. (2011). Motivational effects of pay for performance: a multilevel analysis of a Korean case, International Journal of Human Resource Management, 22(18): 3929-3948.

The theory the researcher explore is on the motivational effects of pay. The key constructs in the theory are pay and the level of satisfaction or motivation they bring to the employees. The constructs are operationalised before being measured. The cause and effects is also evident in this study. Pay is hypothesis as the cause of motivation.  Moderators in the study are monetary value and the perception of the practice. The methodology employed in the study was simple randomizing sampling data was collected from 640 individuals from 30 companies in Korea. The statistical analysis method used in the used was the hierarchical linear modeling.  Findings of the study showed that monetary work value did not significantly moderate the motivational effect of the compensation practice after the employees controlled their perceptions of pay risk and intrinsic work value. This therefore, indicate that it is not always true that monetary value at the work place would impact or motivate employees. Employee’s perceptions about their pay risk help them to control themselves. It also indicates other factors that contribute to employee motivation apart from monetary value.

Presslee, A., Vance, T., Webb, R. (2013). The Effects of Reward Type on Employee Goal Setting, Goal Commitment, and Performance, Accounting Review, 88(5):1805-1831.

In this study, the researcher explores on the theory of motivation and performance.  The contacts the researchers’ uses and which are operetioanlised are the tangible reward systems such as cash and performance. The mediating and moderating variables are the strength of the competitive effects, points earned and the perceive benefits of the incentives.  These tangible rewards are hypothesized as the cause of goal, setting, goal commitment and performance. This as a quantitative study that sought to test various hypotheses related to the impacts of rewards on goal setting, commitment and performance.  A total of 911 employees working at five call centers were included in the study. Out of this, only 627 equivalent to 69% completed the questionnaires, out of these, 53 were dropped because they did not turn out or work in May which was required.  These call centers were categorized into two. Those in three locations earned points that were redeemable while the others in the two locations earned cash rewards for goal attainment. The researcher used Stata 12.0 to estimate the hypothesized structural equation model (SEM) in analysis of the results.  Results indicated that cash rewards increased performance through their effects on the difficulty of the employees selected. This therefore shows that there is close relationship to the fact that employees are highly motivated by rewards that they can easily see and put into use as exhibited by this study. This study therefore, shows some contribution of the theory to the already studies that have already been carried out.

Boachie-Mensah, F., & Ophelia D. (2011). Performance-Based Pay as a Motivational Tool for Achieving Organisational Performance: An Exploratory Case Study, International Journal of Business & Management, 6(12):270-285.

The theory that the researchers explore is whether performance based related pay motivates the employees to ensure that organization goals and objectives are met. The constructs used in the study are the impact of performance related pay and the level of motivation that comes with this.  The mediating and moderating variables in this study were employees’ perception, money, and other rewards.  The study was guided by various hypotheses. One hundred and fifty respondents were sampled out and adopted in the study. They included 20 managerial staff and 60 non-managerial staff.  The questionnaire was the main data collection instrument that was used in the study.  A two –way ANOVA tables was also used as a statistical analyses method to test the main hypothesis. The results in the study indicated that there was minimal effect of performance-based pay on employee performance.  Furthermore, the results indicated that motivation effect of merit pay is affected by biased performance appraisal.  This finding therefore contributes to the theory of motivation as it provides a different perspective that it is not always that performance related pay impacts on the employee performance.

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