Post on 19-Aug-2018
COMPENSATION SYSTEMS IN EUROPEAN TRANSITION STATES: AN
ANALYSIS OF PATH DEPENDENCE, ISOMORPHIC EFFECTS,
AND AGENCY-BASED DETERMINANTS
Inaugural dissertation
submitted to attain the academic degree
doctor rerum politicarum
(Doktor der Wirtschaftswissenschaften)
at the
ESCP Europe Wirtschaftshochschule Berlin
by
Ihar Sahakiants
Berlin
2013
Doctoral examination committee:
Chairman: Prof. Dr. Ulrich Pape
Examiner: Prof. Dr. Marion Festing
Examiner: Prof. Stephen J. Perkins, DPhil (Oxon)
Date of oral defense: June 14, 2013
Acknowledgments
Looking back at the years devoted to working on this dissertation, I think about the many
people who have filled me with enthusiasm and supported my academic endeavors.
First of all, I would like to thank Prof. Marion Festing, my supervisor and co-author
of the articles presented in this dissertation, for her advice and willingness to share her
knowledge and expertise. I also thank Prof. Stephen Perkins for reviewing my dissertation
and for his constructive comments during several conferences dedicated to international
human resource and reward management, as well as during the oral defense of my
doctoral thesis. I am grateful as well to Prof. Allen D. Engle and Prof. Peter Dowling for
their cooperation, support, and fruitful discussions.
I would also like to thank all the professors and my current and former colleagues
at ESCP Europe Berlin for their support, comments, and suggestions on different projects
included in this dissertation.
Finally, I express my foremost gratitude to my parents, my wife Tanya, and my
sons Andrei and Alexander for their love and support.
Contents
iv
Contents
Figures ................................................................................................................................... vi
Tables .................................................................................................................................... vii
Abbreviations ........................................................................................................................ viii
1. Introduction ....................................................................................................................... 1
1.1. Description of the papers ............................................................................................ 2
1.1.1. Conceptual papers ............................................................................................... 4
1.1.2. Empirical papers ................................................................................................... 4
1.1.2.1. Research questions ...................................................................................... 5
1.1.2.2. Theoretical backgrounds .............................................................................. 7
1.1.2.3. Methods used ............................................................................................. 11
1.2. Structure of the dissertation ...................................................................................... 13
2. Paper I. HRM Activities: Pay and Rewards ...................................................................... 14
3. Paper II. Compensation Practices in Central and Eastern European EU Member
States—An Analytical Framework Based on Institutional Perspectives, Path
Dependencies, and Efficiency Considerations ...................................................................... 15
4. Paper III. Path-Dependent Evolution of Compensation Systems in Central and Eastern
Europe: A Case Study of Multinational Corporation Subsidiaries in the Czech Republic,
Poland and Hungary ............................................................................................................. 16
5. Paper IV. Determinants of Share-Based Compensation Plans in Central and Eastern
European Public Companies: An Institutional Analysis ........................................................ 17
6. Paper V. The Use of Executive Share-Based Compensation in Poland: A Study Based on
Institutional and Agency Theory Perspectives ..................................................................... 18
Contents
v
7. Discussion ........................................................................................................................ 19
7.1. Discussion of Results .................................................................................................. 19
7.1.1. Results related to the path dependence perspective ....................................... 21
7.1.2. Results related to the isomorphism theory ....................................................... 22
7.1.3. Results related to the agency perspective ......................................................... 23
7.2. Limitations ................................................................................................................. 24
7.3. Avenues for future research ...................................................................................... 25
8. Conclusion ....................................................................................................................... 27
8.1. Theoretical contributions .......................................................................................... 27
8.2. Implications for managerial practice ......................................................................... 28
8.3. Closing remarks .......................................................................................................... 30
References ............................................................................................................................ 31
Figures
vi
Figures
Figure 1-1. Principal-agent and principal-principal conflicts ................................................ 10
Figure 7-1. Interrelation between the results of the papers constituting the
dissertation ........................................................................................................................... 20
Figure 7-2. Interplay of principal-agent and principal-principal conflicts in CEE
companies ............................................................................................................................. 24
Tables
vii
Tables
Table 1-1. Summary of papers composing the dissertation .................................................. 3
Table 1-2: Summary on empirical studies .............................................................................. 5
Table 1-3. Pillars of institutions .............................................................................................. 8
Table 1-4. Descriptions of samples ....................................................................................... 12
Abbreviations
viii
Abbreviations
BRIC Brazil, Russia, India, China
BUX Budapest Stock Index
CEE Central and Eastern Europe
CEO chief executive officer
EU European Union
HRM human resource management
IHRM international human resource management
MNC multinational corporation
PX Prague Stock Exchange Index
SOE state-owned enterprise
WIG 20 Warsaw Stock Exchange Top 20 Index
Introduction
1
1. Introduction
Compensation management represents not only a key organizational practice, but is also
one of the most extensively investigated fields of management science. Academic work on
both monetary and non-monetary incentives dates back to as long as a century ago
(Myers, 2011; Wagner-Tsukamoto, 2007). Recently, there has been a growing body of
research in the field of international rewards, ranging from research on expatriate pay
(Reynolds, 1986) to transnational compensation (Festing, Eidems, & Royer, 2007). To date,
research on the topic has been dominated by studies conducted in industrialized
economies—countries with stable institutional environments. However, multinational
corporations (MNCs) are often faced with the challenge of designing and implementing
pay systems “within the context of shifting political, economic, and social conditions”
(Lowe, Milliman, De Cieri, & Dowling, 2002, p. 46), or in countries with less stable
institutional contexts, such as emerging economies.
In this respect, the analysis of the impact of institutional environments on
organizations is especially relevant in European post-state socialist economies, which are
often referred to as European transition states (Brewster & Bennett, 2010; Hoskisson,
Eden, Lau, & Wright, 2000). It is not only political, social, and economic transformation in
these countries, but also the sheer magnitude of this transformation from state-socialist
regimes to democratic and free market societies—often referred to as “institutional
upheaval” (Newman, 2000; Roth & Kostova, 2003)—which makes research in this field
especially challenging. Indeed, the pace of transformation from centrally planned
economic organization to free market economies in the transition countries of Central and
Eastern Europe (CEE) is stunning. However, now, more than two decades after the fall of
state-socialist regimes in Europe, research on the evolution and explanations of specific
compensation practices in the region is still scarce. The extant literature is dominated by
mainly descriptive work (cf., for instance, Koubek, 2009; Listwan, Pocztowski, & Stor,
2009; Poór, 2009) or studies referring to the cultural explanations of particularities in
organizational practices in CEE (Kiriazov, Sullivan, & Tu, 2000; Tung & Havlovic, 1996)
consistent with the notion of national culture developed by Hofstede (1980). While the
contribution of these studies to our understanding of organizational practices and
country-specific idiosyncrasies should by no means be underestimated, there is a need for
Introduction
2
alternative explanations, which could deliver answers on the roots, evolution, and current
determinants of compensation practices in the CEE region.
The present dissertation is an attempt to address this research deficit. In doing so, I
focus on a wide range of compensation practices included in the notion of total rewards
(cf., for instance, Manas & Graham, 2003) in CEE transition states: Base pay, variable and
non-monetary compensation, and share-based pay schemes. Taking into consideration the
heterogeneous nature of organization and management studies as an eclectic field (Corley
& Gioia, 2011), this dissertation features a multifaceted analysis, which uses various—
both economic and sociological—theories and research methods to probe into the area of
pay systems in CEE. In doing so, the overall work was conceived as an attempt to extend
the application of the relevant theoretical approaches used in the academic fields of
human resource management and organization studies to the context of European
transition states. In the following subchapters I describe respective research papers which
build the body of the present dissertation, including the research questions, theoretical
backgrounds, and methods used.
1.1. DESCRIPTION OF THE PAPERS
This dissertation is based on five papers comprising one published book chapter (Festing,
Engle, Dowling, & Sahakiants, 2012), three published journal articles (Festing &
Sahakiants, 2010b, 2011, 2013), and one research paper currently under review in the
International Journal of Human Resource Management. All the papers were written in co-
authorship with my supervisor Professor Marion Festing and—in the case of Paper I—
additionally in co-authorship with Professor Allen D. Engle, Sr. and Professor Peter
Dowling. Therefore, in the following introduction, discussion, and conclusion sections of
this dissertation, I will refer to these studies from the first-person plural perspective
(“we”), meaning all the co-authors of the respective collaborative work. However, the
first-person singular pronoun (“I”) will be used to summarize, discuss, and draw
conclusions on the papers.
Table 1-1 presents a summary of articles constituting the dissertation. The papers
are listed in the order in which the respective studies were conducted.
Introduction
3
Table 1-1. Summary of papers composing the dissertation
Paper Nr. Full reference Type of paper
Paper I Festing, M., Engle, A. D., Dowling, P. J., & Sahakiants, I. (2012).
HRM Activities: Pay and Rewards. In C. Brewster & W.
Mayrhofer (Eds.), Handbook of Research in Comparative
Human Resource Management (pp. 139–163). Cheltenham:
Edward Elgar Publishing.
Conceptual book
chapter
Paper II Festing, M., & Sahakiants, I. (2010). Compensation Practices in
Central and Eastern European EU Member States—An
Analytical Framework Based on Institutional Perspectives, Path
Dependencies, and Efficiency Considerations. Thunderbird
International Business Review, 52, 203–216.
DOI: 10.1002/tie.20325.
Conceptual journal
Article
Paper III Festing, M., & Sahakiants, I. (2013). Path-Dependent Evolution
of Compensation Systems in Central and Eastern Europe: A
Case Study of Multinational Corporation Subsidiaries in the
Czech Republic, Poland and Hungary. European Management
Journal, 31, 373–389. DOI: 10.1016/j.emj.2013.01.005.
Empirical journal
Article
Paper IV Festing, M., & Sahakiants, I. (2011). Determinants of Share-
Based Compensation Plans in Central and Eastern European
Public Companies: An Institutional Analysis. Journal for East
European Management Studies, 16, 338–357.
Empirical journal
Article
Paper V Festing, M., & Sahakiants, I. (2012). The Use of Executive Share-
Based Compensation in Poland: A Study Based on Institutional
and Agency Theory Perspectives. Manuscript under review in
the International Journal of Human Resource Management.
Empirical journal
Article
In the following, these papers will be referred to according to the consecutive
numbering used in Table 1-1 (e.g., Paper I or Paper V).
The first two publications are conceptual papers presenting the particularities and
research on comparative international rewards and theoretical explanations of
compensation systems in CEE. The remaining three papers introduce the results of
Introduction
4
empirical research on two different aspects of rewards management in CEE: Total pay
systems in the foreign subsidiaries of multinational corporations (MNC) and share-based
compensation schemes in CEE publicly traded companies.
1.1.1. Conceptual papers
The first paper presented in this dissertation is a book chapter dedicated to the discussion
of comparative international compensation from the total rewards perspective (Manas &
Graham, 2003). Here, we emphasize the importance of a special consideration of national
contexts as a major determinant of pay practices. It is suggested that local contexts should
be analyzed at different levels of analysis, including individual, organizational, and
environmental variables. The literature review on international and comparative pay is
supported by official statistical and compensation benchmark data provided by Hewitt
Associates.
The second paper deals with more specific issues related to international
compensation, namely to the adoption of pay practices in CEE-based companies on the
examples of the Czech Republic, Poland, and Hungary, which were selected for this and
two further studies (Papers III and IV) as being representative of the CEE region in general
(cf. Paper II for an explanation of the rationale behind country choice). Based on a
literature review and compensation data provided by Hewitt Associates, we analyzed
major impact factors affecting the transfer of Western-type compensation practices, such
as high-performance variable pay schemes, by paying special attention to the path
dependence (Deeg, 2005; Sydow, Schreyögg, & Koch, 2009; Whitley & Czaban, 1998) of
organizational practices and mechanisms of isomorphic institutional change (DiMaggio &
Powell, 1983). Efficiency or rational choice considerations (Abrahamson, 1991) were
additionally introduced to separate market-based arguments from the remaining
institutional factors.
1.1.2. Empirical papers
The empirical papers included in this dissertation build on the assumptions of the first two
conceptual articles (Papers I and II), including a specific consideration of total rewards
components in international pay comparisons, the existence of mechanisms promoting
the isomorphism of organizational practices in CEE companies, and the organizational path
Introduction
5
dependence of pay systems in the region. These empirical studies were conceived to
contribute to the understanding of various aspects of total rewards management in CEE:
The general path-dependent evolution of pay practices in CEE (Paper III), share-based
practices in listed publicly traded companies in the Czech Republic, Poland, and Hungary
(Paper IV), and executive share-based pay in Polish listed companies (Paper V).
Table 1-2 presents the research objects, theoretical backgrounds, and methods
used in the empirical papers and described in the following subsections.
Table 1-2: Summary on empirical studies
Paper
Nr.
Research object Theoretical
background
Data collection
method
Data analysis
method
Paper III Evolution of compensation
systems in the Czech
Republic, Poland, and
Hungary
Path dependence
theory
Interviews,
secondary data
(company
documents,
academic
research)
Exploratory
thematic
analysis (within
case study
design)
Paper IV Share-based pay schemes
in the Czech Republic,
Poland, and Hungary (in
listed public companies)
Neo-institutional
(isomorphism) theory
Secondary data
(company annual
reports)
Content
analysis
Paper V Executive share-based
compensation in Poland
(in listed public
companies)
Principal-agent
theory,
neo-institutional
(isomorphism) theory
Secondary data
(company annual
reports)
Logistic
regression
analysis
1.1.2.1. Research questions
As described above, the research questions underlying the empirical papers cover a broad
area of knowledge pertaining to compensation systems in the CEE region. They range from
more general issues on the developmental paths (Sydow et al., 2009) of compensation
systems and the reasons for the persistence of historical legacies with respect to pay
Introduction
6
practices, to more specific questions relating to the determinants of current share-based
pay practices, which have an at least novel or even “institutionally contested” (Sanders &
Tuschke, 2007) character in post-state socialist economies. These research questions are
complementary in a sense that they address various aspects of compensation systems in
the CEE region with different levels of organizational continuity: From general pay
practices—including basic and variable pay, social benefits, and other non-monetary
rewards, which existed prior to transformation and underwent at times radical
transformation thereafter—to completely novel practices such as share-based pay, which
did not exist in the state-socialist period.
Paper III presents an analysis of pay practices in CEE companies from a dynamic
evolutionary perspective, following the often cited notion of the path dependence of the
transformation process and organizational practices in CEE (Aguilera & Dabu, 2005;
Czaban, Hocevar, Jaklic, & Whitley, 2003; Stark, 1992; Whitley & Czaban, 1998), and seeks
to answer the following questions:
What major institutions during the state-socialist period influenced and formed
a specific path with respect to compensation management in CEE?
What are the reasons for path continuity during the transformation period?
What are the limits and necessary conditions for changing historically
determined organizational practices?
Paper IV addresses the following research question:
What are the determinants of share-based compensation schemes in CEE?
Here, the institutional determinants of share-based compensation schemes in the
Czech Republic, Poland, and Hungary—related mostly to national regulations—are
explored.
In Paper V, we statistically analyze the impact of factors such as state ownership,
financial industry affiliation, ownership concentration, family ownership, and
organizational size, which are institutional and agency-based variables derived from extant
literature on the topic. While the main research question is similar to that of Paper IV,
with the only difference being that this paper focuses on executive share-based pay, we
aim at answering two additional major research questions:
Introduction
7
Can the assumptions of the standard principal-agent theory be used to explain
the use of executive share-based pay in Poland?
What are the most important institutional determinants affecting executive
equity-based compensation schemes in Poland?
1.1.2.2. Theoretical backgrounds
With respect to the choice of theoretical backgrounds, Mintzberg suggested: “*W+e must
choose our theories according to how useful they are, not how true they are” (2005, p.
356). Following this rationale, we applied three major theories, which are—as I believe—
the most suitable for probing into the specific aspects of pay in CEE described above. First
of all, the path dependence theory (David, 1994; Deeg, 2005; Pierson, 2000; Sydow et al.,
2009; Vergne & Durand, 2010) was used in Paper III to analyze and explain the evolution
of pay practices in CEE subsidiaries of a large North-American MNC. Here, the
understanding of organizational path dependence is consistent with the definition given
by Sydow, Schreyögg, and Koch (2009), according to which organizational path
dependence is “a rigidified, potentially inefficient action pattern built up by the
unintended consequences of former decisions and positive feedback processes” (p. 696).
In this respect, Deeg (2005) emphasized the predictable character of path-dependent
“pattern[s] of behavior” (p. 29). However, the analytical power of the path dependence
theory lies not only in predicting behavior, but also in explaining the antecedents—
“typical strategies, routine approaches to problems, and shared decision rules” (Deeg,
2005, p. 29)—of an organizational path. Here, self-enforcing mechanisms such as
coordination, complementary, learning, and adaptive expectation effects (Deeg, 2005;
Sydow et al., 2009) play a key role in the creation and preservation of a path. (For a
discussion on the path dependence theory, including self-reinforcing mechanisms, cf.
Paper III).
The second theoretical approach used in empirical Papers IV and V to explain
institutional pressures promoting the application of share-based compensation in CEE in
general and executive equity-based pay in Polish public companies in particular is the
isomorphism theory elaborated by DiMaggio and Powell (1983). According to this theory,
organizations are exposed to pressures towards isomorphism within their organizational
fields, i.e., with respect to “organizations, that, in the aggregate, constitute a recognized
Introduction
8
area of institutional life” (DiMaggio & Powell, 1983, p. 148). These isomorphic effects are
induced by coercive, mimetic, and normative mechanisms of institutional change, which
correspond to the regulative, cultural-cognitive, and normative conceptions or pillars of
institutions (cf. Table 1-3 below) conceptualized by Scott (2001, 2003).
Table 1-3. Pillars of institutions
Regulative Normative Cultural-Cognitive
Basis of compliance Expedience Social obligation Taken-for-grantedness
Shared understanding
Basis of order Regulative rules Binding expectations Constitutive schema
Mechanisms Coercive Normative Mimetic
Logic Instrumentality Appropriateness Orthodoxy
Indicators Rules
Laws
Sanctions
Certification
Accreditation
Common beliefs
Shared logics of action
Basis of legitimacy Legally sanctioned Morally governed Comprehensible
Recognizable
Culturally supported
Source: Scott (2001, p. 52).
Although we integrated the path dependence perspective as explaining resistance
to change and institutional isomorphism considerations relating to sources of change, in
conceptual Paper II, and notwithstanding the fact that the theories of institutional
isomorphism and path dependence are sometimes considered to be related theories
(Kominek, 2009; Sydow & Schreyögg, 2013), we strictly separated these two theoretical
perspectives in our empirical work presented in Paper III. For instance, assumptions of the
neo-institutional theory could have been used to analyze the process of isomorphic
change within the path-building process during the state-socialist period. However, I
believe that the use of the isomorphism theory would have significantly complicated
Introduction
9
reasoning without significantly contributing to the analysis of the ultimate research
question, i.e., the path-dependent evolution of compensation practices in CEE.
Finally, the principal-agent theory (Jensen & Meckling, 1976) was used to probe
the organizational and contextual determinants of executive share-based compensation
schemes in Polish listed public companies (Paper V). According to the assumptions of this
theoretical approach, principals (owners, shareholders, etc.) use long-term incentives for
agents (managers, directors, etc.) to mitigate goal conflicts between these two parties
(Eisenhardt, 1989). The respective theoretical assumptions have been used widely in
research related to executive, including share-based, compensation (Filatotchev & Allcock,
2010; Pennings, 1993).
However, recently, the validity of standard agency assumptions in a context
beyond the industrialized world has been increasingly questioned (McCarthy & Puffer,
2008; Wright, Filatotchev, Hoskisson, & Peng, 2005). As a result, there have been calls to
use a combination of the principal-agent and institutional theories to study organizational
practices in emerging economies (Kang & Yanadori, 2011; Wright et al., 2005), and thus in
CEE transition countries. These calls are based on the assumption of the different nature
of corporate governance conflicts in CEE, which have been identified as principal-principal
conflicts (Yoshikawa & Rasheed, 2010; Young, Peng, Ahlstrom, Bruton, & Jiang, 2008).
According to Young et al., these conflicts arise “between controlling shareholders and
minority shareholders [and] result from concentrated ownership, extensive family
ownership and control, business groups structures, and weak legal protection of minority
shareholders” (2008, p. 196)—features, as a whole typical of emerging economies as
opposed to industrialized countries in general and the USA, the birthplace of the principal-
agent theory, in particular. The difference between standard principal-agent conflicts and
principal-principal conflicts is presented in Figure 1-1 below.
Introduction
10
Figure 1-1. Principal-agent and principal-principal conflicts
Source: Adapted from Young et al. (2008, p. 200).
The intensity of principal-principal conflicts seems to be dependent on institutional
antecedents—such as formal and informal institutions—and ownership concentration
(Young et al., 2008), which can be regarded as representing the regulative, normative, and
cultural-cognitive aspects of local institutional contexts (Scott, 2001) and thus relate to the
coercive, mimetic, and normative isomorphic mechanisms described by DiMaggio and
Powell (1983).
While the first two theoretical perspectives described above (theories of path
dependence and institutional isomorphism) can be considered as related, the principal-
agent theory is different from both the path dependence and neo-institutional approaches
in at least two ways. Firstly, unlike the neo-institutional and path dependence theories,
which primarily represent macro perspectives (Heikkila, 2011; McKinley & Mone, 2003),
the principal-agent theory concentrates on the micro level. Secondly, while the path
dependence and neo-institutional theories represent sociological approaches to
organizational theory, the agency theory is classified into the area of organizational
economics (Swedberg, 2003). However, our decision to apply a combination of neo-
institutional and principal-agent theories in Paper V was based initially on the quite
extensive use of these two theories to study organizational phenomena in emerging
economies (Douma, George, & Kabir, 2006; Kang & Yanadori, 2011), which can serve as
proof of both of these theoretical approaches’ compatibility.
Professional
managers
(agents)
Controlling
shareholders
Managers
affiliated with
controlling
shareholders
(principals)
Principal-agent conflicts
Principal-principal
conflicts
Wid
ely- disp
ersed
shareh
old
ers
(prin
cipals)
Min
ority
shareh
old
ers
(prin
cipals)
Introduction
11
1.1.2.3. Methods used
According to Buchanan & Bryman (2007), method choices in organizational research
should be contingent on a number of considerations. Apart from the research objectives,
these considerations include epistemological positions and paradigms, as well as
organizational, historical, personal, and other properties related to focal organizations.
Similar to the choice of the theoretical perspectives described above, our decisions on the
methods used for our empirical work were problem-driven rather than paradigm-driven
(for a discussion on the shift from paradigm-driven to problem-driven work in organization
theory, cf. G. F. Davis & Marquis, 2005). As Gioia and Pitre wrote: “*T+raditional positivist
theory building and deductive approaches… are relevant when issues are defined
according to their basic assumptions. However, using different theory-building approaches
to study disparate issues is a better way of fostering more comprehensive portraits of
complex organizational phenomena” (1990, p. 587).
With respect to the “ultimate goal of analysis” (Shah & Corley, 2006), the empirical
work presented in this dissertation is based on the assumptions of two of the four main
paradigms (Burrell & Morgan, 2005): The interpretive and functionalist approaches. While
the first two empirical studies presented in Papers III and IV are qualitative exploratory
studies based on rather limited sample sizes characteristic of qualitative research, the last
paper, Paper V, is structured as a classical theory-testing study based on a final sample of
362 companies (cf. Table 1-4 below).
It should be mentioned, though, that the divide between the functionalist-
interpretive paradigms underlying the papers included in this dissertation is more complex
than the mere differentiation between the quantitative and qualitative methodologies
sometimes suggested in the literature (cf. Shah & Corley, 2006). In accordance with the
differentiation between positivist/post-positivist and non-positivist (non-critical)
paradigms suggested by Brand (2009), both Papers III and IV, presenting qualitative
research, build partly on post-positivist assumptions, not only with respect to the post-
positivist methodology, which has relied increasingly on qualitative methods (Guba &
Lincoln, 1994), but also ontologically and epistemologically. For instance, the path
dependence of compensation practices in CEE explored in Paper III reflects the
“functionalist logic [which] identifies predictable self-reinforcing processes” (Mahoney,
2000, p. 519), and it can thus be partly attributed to the functionalist paradigm. On the
Introduction
12
other hand, the socially constructed nature of path creation (Garud, Kumaraswamy, &
Karnøe, 2010) fits our research into the framework of the non-positivist—especially,
interpretative—paradigm (Brand, 2009).
Table 1-4. Descriptions of samples
Paper
Nr.
Interview partners/Companies studies Initial
sample
Final
sample
Paper III Global level (Headquarters): managers at the compensation and
benefits department, vice-president
Regional level: employee of the shared-services unit
Local level (subsidiaries): representatives of local top
management, HR management, and employee representatives
13 13
Paper IV Public companies representing the major stock market indices
of the Warsaw (WIG 20), Prague (PX), and Budapest (BUX) stock
exchanges (as of December 2, 2010) and incorporated in the
respective CEE countries.
46 32
Paper V Public companies listed on the Warsaw Stock Exchange on
December 12, 2011 and registered in Poland.
426 362
The research presented in Paper III builds on an embedded single case study (Yin,
2003) based on interviews and secondary data. The major rationale for choosing this
methodological approach was the necessity to understand and interpret the evolution of
organizational practices starting from the respective systems prior to transformation. The
data analysis technique used in this study can be described as exploratory thematic
analysis (Onwuegbuzie & Tedllie, 2003). Our research based on multiple interviews
conducted with actors in different units of an embedded case study, the analyses of
company documents, and academic research on historical and current compensation
practices in CEE, had an iterative character, which is a common feature of analysis within
case study design (Yin, 2003).
In the second empirical article (Paper IV), a qualitative study of share-based
compensation schemes in Czech, Hungarian, and Polish companies belonging to major
Introduction
13
stock indices was performed based on the content analysis (Krippendorff, 2013) of
company annual reports. Also in this case, we aimed at exploring those factors affecting
the analyzed compensation schemes, rather than at theory testing.
On the contrary, the research presented in Paper V builds on logistic regression
(Hosmer & Lemeshow, 2000) tests of hypotheses based on the assumptions of the agency
and neo-institutional theories. The independent variables for this study were derived from
studies conducted in the contexts of industrialized economies (Alves, 2011; Berrone,
Makri, & Gomez-Mejia, 2008; Pendleton, 2006; Porac, Wade, & Pollock, 1999; Rankin,
2010; Ryan & Wiggins, 2000; Yoshikawa & Rasheed, 2010) and the extant research on the
particularities of corporate governance systems in emerging economies—including CEE
transition states (Peng, Wang, & Jiang, 2008; Weinstein & Obloj, 2002; Young et al., 2008).
By selecting this approach, we aimed at verifying the applicability of the agency theory in
CEE post-state socialist economies, i.e., within specific institutional settings in the region.
1.2. STRUCTURE OF THE DISSERTATION
Following the introduction section of the present dissertation, the bibliographical
information on each of the five papers is provided. In the discussion section, I summarize
and discuss the main findings, limitations, and avenues for future research. Here, the
discussion is organized according to the theoretical perspectives used in the respective
papers: Path dependence, isomorphic pressures, and agency considerations. Finally, I
draw conclusions and suggest implications for academic research and practice.
Paper I. HRM Activities: Pay and Rewards
14
2. Paper I. HRM Activities: Pay and Rewards
Published as: Festing, M., Engle, A. D., Dowling, P. J., & Sahakiants, I. (2012). HRM
Activities: Pay and Rewards. In C. Brewster & W. Mayrhofer (Eds.), Handbook of Research
in Comparative Human Resource Management (pp. 139–163). Cheltenham: Edward Elgar
Publishing.
Paper II. Compensation Practices in CEE EU Member States
15
3. Paper II. Compensation Practices in Central and
Eastern European EU Member States—An
Analytical Framework Based on Institutional
Perspectives, Path Dependencies, and Efficiency
Considerations
Published as: Festing, M., & Sahakiants, I. (2010). Compensation Practices in Central and
Eastern European EU Member States—An Analytical Framework Based on Institutional
Perspectives, Path Dependencies, and Efficiency Considerations. Thunderbird International
Business Review, 52, 203–216.
DOI: 10.1002/tie.20325.
Paper III. Path-Dependent Evolution of Compensation Systems in CEE
16
4. Paper III. Path-Dependent Evolution of
Compensation Systems in Central and Eastern
Europe: A Case Study of Multinational Corporation
Subsidiaries in the Czech Republic, Poland and
Hungary
Published as: Festing, M., & Sahakiants, I. (2013). Path-dependent Evolution of
Compensation Systems in Central and Eastern Europe: A Case Study of Multinational
Corporation Subsidiaries in the Czech Republic, Poland and Hungary. European
Management Journal, 31, 373–389.
DOI: 10.1016/j.emj.2013.01.005.
Paper IV. Determinants of Share-Based Compensation Plans in CEE Public Companies
17
5. Paper IV. Determinants of Share-Based
Compensation Plans in Central and Eastern
European Public Companies: An Institutional
Analysis
Published as: Festing, M., & Sahakiants, I. (2011). Determinants of Share-Based
Compensation Plans in Central and Eastern European Public Companies: An Institutional
Analysis. Journal for East European Management Studies, 16, 338–357.
Paper V. The Use of Executive Share-Based Compensation in Poland
18
6. Paper V. The Use of Executive Share-Based
Compensation in Poland: A Study Based on
Institutional and Agency Theory Perspectives
Under review as: Festing, M., & Sahakiants, I. (2012). The Use of Executive Share-Based
Compensation in Poland: A Study Based on Institutional and Agency Theory Perspectives.
Manuscript under review in the International Journal of Human Resource Management.
Available from the author upon request.
Discussion
19
7. Discussion
The research presented in the papers constituting this dissertation shows that
idiosyncrasies found within compensation systems in CEE countries can be explained
effectively using various theoretical perspectives and methodological approaches. In the
following, I will discuss the results of the studies by showing the interrelation between the
single papers of the present dissertation and by addressing each of the theoretical
approaches used in the above studies, as well as present limitations and avenues for
future research.
7.1. DISCUSSION OF RESULTS
Figure 7-1 below presents the major results and relationships between the findings of the
papers constituting the present dissertation.
The analysis of international comparative rewards presented in Paper I showed
that international comparisons of various pay systems should be performed under the
specific consideration of both the monetary and non-monetary elements of total rewards
and take into account national contexts. This holistic view on comparative rewards and
the consideration of contextual factors was instrumental in analyzing the adoption of
Western-type compensation systems in CEE (cf. Paper II), a region in which pay systems
underwent and still undergo transformation with respect to both monetary and non-
monetary rewards. Here, the adoption of compensation systems is influenced by
isomorphic pressures (DiMaggio & Powell, 1983) resulting mainly from local institutions
such as legal regulations and trade unions. International companies represent a further
important source of change in CEE. The influence of sources of isomorphic change is
contingent on specific labor market conditions, particularly with respect to skilled labor
shortages, and the path dependence (Flanagan, 1998; Whitley & Czaban, 1998) of the HR
function in CEE organizations. Furthermore, the intensity of this path dependence, which
denotes the historical legacies of state-socialist organizations, varies depending on
company characteristics within the four major organization types present in segmented
post-state socialist capitalist systems (Martin, 2008): SOEs, privatized, de novo, and
international companies.
Discussion
20
Figure 7-1. Interrelation between the results of the papers constituting the dissertation
While the analysis presented in Paper II shows—along with the need to consider
specifically institutional influences on organizational practices—the primary importance of
the notion of path dependence for the study of pay practices in CEE mainly as a force
resisting organizational change promoted by isomorphic mechanisms, Paper III explores
the nature and origin of organizational path dependence in CEE. However, the analysis
and results of this paper go beyond the idea of HR function path dependence in CEE
companies, developed in Paper II, and deliver insights into the pre-transformation
evolution of the organizational path with respect to compensation practices in CEE as well
as existing conditions supporting this specific developmental path during the
Paper I Total rewards perspective is a valuable tool
for valid comparisons of international pay systems
Importance of contextual factors for a comparative analysis of international rewards
Paper III The initial sources of pay systems’ path
dependence in CEE were related to mechanisms complementary to central wage planning
Currently, national laws, worker representations, and organizational legacies maintain path dependence
MNCs, international management consulting companies, professionalization of the HR function, and generational change are potential sources of path dissolution
Paper IV Share-based compensation schemes in the Czech Republic, Poland, and Hungary are contingent on:
local national legislation and
ownership structures
Paper V Executive share-based compensation in
Polish public companies is influenced by: - state ownership, irrespective of the
state’s share in the company - company size
The impact of industry affiliation on executive share-based pay in Poland is moderated by company size
Paper II The transfer of pay systems in CEE is dependent on:
coercive, normative, and mimetic sources of isomorphic change (including both national and international institutions)
labor market pressures, and
path dependence of the HR function (the intensity of path dependence varies depending on the company type—state-owned, privatized, international or de novo)
Direct contribution to the respective papers
Discussion
21
transformation period. Here, the analysis covers historical developments with respect to
both monetary and non-monetary pay elements, in accordance with the approach
presented in Paper I.
Papers IV and V build partially on the findings of conceptual Papers I and II, in the
first instance with respect to the requirement to consider specifically institutional contexts
(in particular, relating to national legislations). The results of Paper V confirm statistically
the major finding of Paper IV, which demonstrates the impact of state ownership on the
existence of share-based compensation plans in Poland. However, the impact of the state,
described in Paper V, goes beyond mere legislatively mandated limitations on executive
pay levels and structures (according to the results of Paper IV) and also pertains to share-
based compensation in companies in which national states have only minority shares—
thus confirming the strong informal influence of the state in (mainly) post-privatization
companies in emerging economies reported in the literature (Dharwadkar, George, &
Brandes, 2000). Another important finding of Paper V is the significant impact of company
size on the existence of equity-based executive pay in Poland, which is in line with
assumptions based on the standard principal-agent theory (Jensen & Meckling, 1976).
These and a further partial effect related to financial industry affiliation are discussed in
the following subchapters, which are structured in line with the major theories used in the
papers constituting this dissertation.
7.1.1. Results related to the path dependence perspective
In conceptual Paper II we analyzed the notion of the HR function’s path dependence,
which—as described above—could be one of the factors facilitating or hampering the
adoption of specific compensation practices. This assumption of path dependence, used in
a rather metaphorical sense (Sydow et al., 2009), i.e., denoting the legacies of pre-
transformation organizational practices, was developed further in Paper III. The latter
paper, in which we specifically considered the complementary effects of self-reinforcing
mechanisms (Deeg, 2005; Sydow et al., 2009), explores the evolution of the
developmental path with respect to compensation practices in CEE. Our analysis showed
that although the major complementary institutions which enhanced and sustained the
path in the state-socialist period—such as central wage planning and an extensive
socialist-type welfare system—do not exist in their original form in CEE transformation
Discussion
22
countries, the path dependence of organizational practices is still maintained by a number
of institutions, including national laws and trade unions. Furthermore, based on our
findings, we suggest several possible ways to break the paths, which include both
exogenous (headquarters of MNCs or international management consulting companies)
and endogenous (generational change or the professionalization of the HR function)
sources.
Although the theory of path dependence was not applied explicitly in our
investigations presented in Paper V, one more interesting result of this study could also be
analyzed using this theoretical approach, namely the significant influence of the state on
pay decisions in companies co-owned by the state. However, the findings of the study
with respect to the informal influence of the state—through former managers of SOEs
employed by the companies, activities of current state officials in management or on
supervisory boards, etc.—could reflect organizational path dependence in CEE not
exclusively with respect to share-based compensation in listed public companies but
rather in relation to decision-making and organizational processes in general. This
phenomenon represents a challenging avenue for future research, as described in
subchapter 7.3 below.
7.1.2. Results related to the isomorphism theory
The assumptions of the neo-institutional, or, more precisely, the isomorphism theory
developed by DiMaggio and Powell (1983), were applied in Papers II, IV, and V. In Paper II,
this perspective was used to conceptualize the analytical framework for the study of
compensation practices in CEE countries, especially pertaining to the transfer of Western-
type—notably, pay-for-performance—pay schemes. Building on an extant literature
review, we attributed the impact of national and EU legislation, and well as trade unions
to a coercive impact; the influence of foreign investors or multinational corporations was
identified as mimetic pressure, while attitudes to the HR function in CEE enterprises were
determined as a normative impact on pay practices in CEE.
This conceptual differentiation between mechanisms of isomorphic change was
adopted in the analysis of share-based compensation in CEE listed public companies
(Paper IV). Here, we found that the coercive impact of national states was the most
powerful force affecting the implementation of the respective schemes in public
Discussion
23
companies, represented on the major stock exchange indices in the countries analyzed.
This finding was refined further by the results of the last paper in this dissertation: The
impact of the state in the CEE country studied (Poland) is not so much coercive but more
subtle—rather mimetic or normative—in nature. However, the expected impact of
financial industry affiliation, which could be attributed either to mimetic or normative
mechanisms of organizational isomorphism, was significant only when company size was
not controlled.
7.1.3. Results related to the agency perspective
The results of Paper V, which builds on a combination of agency and neo-institutional
theoretical approaches, are interesting in a number of ways. On the one hand, only one of
our agency-based hypotheses proved to be significant, namely the one related to the
impact of company size on the existence of executive share-based compensation. On the
other hand, no significant impact of the two remaining variables based on this theoretical
perspective, i.e., ownership concentration and family as the major shareholder, could be
found.
I suggest that the reason for the insignificance of the latter two results and the
significance of the impact of organizational size can be explained by the existence of
principal-principal conflicts characteristic of corporate governance systems in emerging
economies (cf. subsection 1.1.2.2 of this dissertation). On the one hand, it seems that the
magnitude of principal-principal conflicts in CEE is not contingent on either ownership
concentration or the fact that the company is predominantly owned by a family, but is
actually dependent on more subtle, informal power constellations. On the other hand, the
findings of Paper V with respect to company size suggest that even in CEE companies with
predominant principal-principal conflicts, there is still a place for principal-agent conflicts
between the controlling principal and the manager controlled by this principal, and these
are more acute in companies whose operations are more complex. Figure 7-2 below
shows both principal-principal and principal-agent relations in CEE public companies.
Discussion
24
Figure 7-2. Interplay of principal-agent and principal-principal conflicts in CEE companies
Source: Adapted from Young et al. (2008, p. 200).
Conversely, the bigger the company in terms of sales, the more complex its
operations. Thus, controlling principals tend to increasingly utilize long-term incentives in
line with the standard principal-agent theory (Jensen & Meckling, 1976).
Overall, although all the papers constituting this dissertation used different
theoretical lenses and methods to study various aspects of compensation systems in CEE
post-state socialist economies, they have one feature in common with respect to the
major results—they all develop respective theories for application in CEE transition states
in particular and emerging economies in general. Thus, the dissertation as a whole
contributes to the fields of human resource management and organization studies,
especially with respect to the analysis of pay practices in post-state socialist economies.
Several specific implications both for theory and practice are presented in the conclusion
section of this dissertation.
7.2. LIMITATIONS
Research presented in this dissertation has a number of limitations relating mostly to
journal articles (Papers II-V). Firstly, in Papers II and V, we used a combination of various
theories, including path dependence and neo-institutional perspectives in the first case
and neo-institutional and principal-agent theories in the second case, to build an analytical
framework for the study of compensation systems in CEE and to study executive share-
based pay systems in Poland, without testing the compatibility of assumptions underlying
the respective theoretical approaches. Secondly, the data used for our empirical research
in Papers IV and V reflect the situations at specific moments in time, and—strictly
Controlling
shareholders
(principals)
Managers
affiliated with
controlling
shareholders
(principals/agents)
Min
ority
shareh
old
ers
(prin
cipals)
Principal-agent
conflicts
Principal-principal
conflicts
Discussion
25
speaking—can deviate from general trends. Thirdly, in all the empirical papers, our
research is based on specific company types: Subsidiaries of a North-American MNC in
Paper III, locally based listed public companies in Poland, Hungary, and the Czech Republic
analyzed in Paper IV, and the same company forms in Poland studied in Paper V. However,
analyses of other company types (i.e., SOEs in Paper III or limited liability companies in
Papers IV and V) or CEE subsidiaries as part of MNCs from other countries of origin (e.g.,
western, southern or northern European on the one hand, and BRIC countries on the
other hand) could deliver results different from those presented in this dissertation.
Finally, there are several limitations related to the methods employed. For
instance, although we sought to minimize the risks of validity problems related to
retrospective interviews, such as faulty memory and rationalization after the fact (Forgues
& Vandangeon-Derumez, 2001), it is still possible that the findings of Paper III are still not
completely free of respective errors, for instance due to the fact that our interview
partners might have presented past events in a way different to what actually occurred.
However, as all the information presented by our interview partners has been carefully
verified during consecutive interviews and by using secondary data, I believe that the risk
of such errors is indeed very small. Further limitations relate to the fact that Paper IV is
based only on an analysis of a rather small number of companies—below the levels
necessary for statistical analysis which could be used to verify the respective findings.
Lastly, in Paper V, we used a dichotomous dependent variable to denote the existence of
executive share-based compensation plans, and thus were not able to analyze either the
monetary value of respective schemes or the percentage of share-based pay in the total
compensation packages of respective directors. However, this limitation reflects data
quality resulting from the current disclosure standards in Poland rather than the method
choice made by the authors. I hope, however, that the further development of
compensation disclosure quality in Poland and other CEE countries will allow for a study of
share-based compensation beyond the mere existence of such pay schemes.
7.3. AVENUES FOR FUTURE RESEARCH
As outlined in Paper I, a very important challenge for comparative compensation research
is the holistic analysis of multiple components constituting total rewards in respective
countries, including both monetary and non-monetary incentives. There is a need for
Discussion
26
more extensive use of this assumption in cross-national research on the determinants of
pay practices, rather than focusing on absolute pay levels or single compensation
elements.
Another challenging avenue for future research is a replication of the studies
presented in this dissertation to different company types, various countries of origin of
the MNCs studied, and further CEE countries. For instance, more dependence on historical
developmental paths is expected to be found in SOEs or in joint ventures with state-
owned partners (Festing & Sahakiants, 2010a). On the other hand, replications of these
studies in other CEE economies as well as Eastern European countries of the former Soviet
Union would allow one to generalize the results of all three empirical studies of this
dissertation to European transition states in general.
A very challenging avenue for further research relates to the findings of Paper V. As
already mentioned in section 7.1.1 of this dissertation, I suggest that the path dependence
theory might be a useful tool for studying the informal influences of national states on
compensation practices in post-privatization CEE firms. Here, an in-depth historical
analysis of management structures and decision-making processes could help to shed light
on the role of the state in post-privatization firms operating in post-state socialist
transition economies.
In the following final chapter, I present the theoretical contributions of the
research presented in this dissertation and its implications for managerial practice.
Conclusion
27
8. Conclusion
To quote Van de Ven, “*a+ central mission of scholars and educators in professional
schools of management… is to conduct research that contributes knowledge to a scientific
discipline, on the one hand, and to apply that knowledge to the practice of management
as a profession, on the other” (1989, p. 486). In the following subchapters I will outline the
theoretical and practical contributions of the present dissertation.
8.1. THEORETICAL CONTRIBUTIONS
Although the theoretical contributions of the research presented in this dissertation are
manifold, they have one thing in common: Based on the assumptions of Paper I and
various theoretical approaches, they all seek to exploit and combine different theoretical
approaches in order to study compensation practices in CEE.
Firstly, in Paper II, we took a first step towards integrating path dependence and
neo-institutional theories for a study of the transfer of pay practices to CEE, a region
which had to rebuild national institutional frameworks after the collapse of state-socialist
regimes. Here, the promotion of novel organizational practices by both endogenous and
exogenous sources of isomorphic change seems to be hampered by historically
determined developmental paths, described by the notion of path dependence. Secondly,
Paper III is an example of the application of path dependence theory to study
organizational practices in CEE. This study contributed to the discussion on path continuity
after a considerable exogenous shock, such as the collapse of state-socialist regimes in
CEE as well as the possibility and limits of breaking an organizational path. Thirdly, the
analysis presented in Paper IV can be regarded as a good example of utilizing the neo-
institutional theory in a study of equity-based pay systems under the specific
consideration of regulatory contexts. Finally, in Paper V, we demonstrated the usefulness
of a combination of standard principal-agent and neo-institutional approaches to studying
executive compensation practices in Poland, first of all, in view of principal-principal
conflicts and informal influences on corporate decision-making in the region. Our results
showed that—unlike agency relationships in industrialized countries—principal-agent
Conclusion
28
relations in European transition states are guided increasingly by informal influences
embedded in the respective institutional contexts.
Taken together, the studies presented in this dissertation can be viewed as an
example of the usefulness of the multiparadigm approach, the value of which is described
by Gioia and Pitre as follows: “Given our multiparadigm perspective, we believe it would
be useful for theory building to be viewed not as a search for the truth, but as more of a
search for comprehensiveness stemming from different worldviews” (1990, p. 587; italics
in original). Thus, we were able to profit from “the multiplicity of perspectives that make
up our field… and take advantage of the diversity organization theory offers” (Schultz &
Hatch, 1996, p. 530) to study the evolution and determinants of compensation systems in
European transition states.
8.2. IMPLICATIONS FOR MANAGERIAL PRACTICE
According to Rynes, Bartunek, and Daft (2001), there is “a considerable gap between
organizational research findings and management practices” (p. 340), which “has been of
longstanding concern to many members of both [the academic and practitioner]
communities” (p. 350). Mohrman, Gibson, and Mohrman Jr. (2001) state: “Today’s world
heightens the need for useful research. Many organizations grapple with new and poorly
understood problems as they adapt to rapidly changing environments… *However,+ as
organizations adopt new approaches to organizing, organizational science has often
lagged behind practice” (p. 357).
Although all of the studies presented in this dissertation are based on the data on
organizational practices in existing organizations, and thus—to some extent—represent a
snapshot of current practices, I believe that my research offers some important
implications for practitioners in the field of HR and for the general management of
companies operating in European post-state socialist economies. On the one hand, a
systemic scientific analysis of organizational practices may bring to light some
relationships and phenomena which are far from obvious to practitioners, thus making
research interesting to the non-academic public. Davis defined “interesting” insights as
those representing “anything which… stands out in their attention in contrast to the
routinized taken-for-granted world of everyday life” (1971, p. 311). On the other hand,
Conclusion
29
implications for practice are related to the dimension of the practical utility of theories,
which, according to Corley and Gioia, “is seen as arising when theory can be directly
applied to the problems practicing managers and other organizational practitioners face”
(2011, p. 18).
I believe that the research presented in this dissertation offers an alternative
perspective to the analysis of organizational phenomena. Rephrasing the assumption put
forward by Ghoshal (2005), whereby bad theories have the potential to destroy good
practices, the unpremeditated use of good theories with undeniable explanatory power—
such as cultural perspectives (Dorfman, Javidan, Hanges, Dastmalchian, & House, 2012;
Hofstede, 1980)—may be non-efficient and lead to stereotyping (Milkovich & Bloom,
1998). Conversely, the use of the path dependence, neo-institutional, and agency
approaches to organizational analysis can in many cases be instrumental in understanding,
predicting, and combating inefficiencies, as well as designing and implementing efficient
organizational systems and practices.
In particular, the studies presented in this dissertation could offer practitioners
concrete guidance in specific issues related to international compensation. For instance,
the total rewards perspective outlined in Paper I could help decision-makers in the field of
compensation and benefits in MNCs design and communicate more equitable pay systems
throughout the globe and thus contribute to increased distributive justice (Bonache,
Sanchez, & Zarraga-Oberty, 2009; Leung, Wang, Zhou, & Chan, 2011) without considering
an equalization of basic pay levels worldwide, which is still a fairly unrealistic undertaking
in view of the current international differences in standards of living (Gross & Wingerup,
1999).
Moreover, an understanding of the nature and mechanics of path dependence,
first outlined in Paper II and developed in Paper III, could help organizations to recognize
inefficient systems and processes related to the respective paths, and then devise
adequate countermeasures. For example, I suggest that HR managers in formerly state-
owned CEE companies should pay special attention to the analysis of existing
compensation structures and incentive systems and—keeping in mind often non-
transparent decision-making processes with respect to pay in CEE enterprises prior to
transformation—focus mainly on procedural justice (Folger & Konovsky, 1989). Moreover,
I suggest that—contrary to the still popular belief that the pay preferences of employees
Conclusion
30
in post-state socialist CEE countries reflect egalitarian attitudes—compensation systems in
the region should be designed to increasingly reward individual performance.
Finally, analyses presented in Papers IV and V offer useful insights into the
considerable impact of both formal and informal institutions on equity-based
compensation systems in CEE, on the one hand, and specific manager-owner relationships
in the region, on the other hand. I believe that of primary importance is knowledge on the
influence of the state on decision-making in CEE post-privatization companies, especially
for HR managers in MNCs that have only recently established operations in the region. An
understanding of such—often informal—influences might be useful for decision-makers
when selecting indicators and benchmarks for designing efficient long-term incentive
packages.
8.3. CLOSING REMARKS
Taken as a whole, the papers constituting the present dissertation represent a single piece
of research consisting of interrelated projects and dedicated to the topic of compensation
practices in CEE transition states. In this work, I addressed various aspects of reward
management in CEE—including both broad-based (i.e., with respect to all employee
groups) and narrow-based (i.e., designed for selected employee groups, above all,
executives) pay systems—by utilizing several theoretical approaches such as the path
dependence, neo-institutional, and principal-agent theories.
I hope that—notwithstanding the limitations of single studies—this article-based
dissertation has the potential to contribute not only to the understanding of pay practices
in the region, but also to the academic fields of human resource management and
organizational studies, on the one hand, and managerial practice, on the other. Still, this
work is only a brick in the foundations of theoretical and practical knowledge on pay
practices in CEE post-state socialist economies, but it can serve as a basis for further
research dedicated to organizational phenomena in European transition states.
References
31
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