The impact of compensation practices on intrapreneurial behaviour
Date
2012-11-02
Authors
Madu, Ugochukwu Obed
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Abstract
As business environments become more complex, with varying degrees of uncertainty, organizations must become more entrepreneurial in order to identify emerging and new opportunities for sustained superior performance. Several factors can promote/enhance corporate entrepreneurship within organizations.
This research study examined the role of compensation practices in the process of elevating employees‘ intrapreneurial behaviour. Drawing on the agency theory, hypotheses relating actual and desired compensation practices to elevated employees‘ intrapreneurial behaviour were empirically examined among different employees from various organizations. The moderating role of department‘s risk control on the relationship between desired compensation practices and elevated intrapreneurial behaviour was also examined.
Empirical data were collected from 209 respondents in different organizations via a survey questionnaire. The measures included actual compensation practices, desired compensation practices, actual intrapreneurial behaviour, elevated intrapreneurial behaviour, and department‘s risk control. The main analytical techniques used in this study were t-test for dependent/related groups, canonical correlation and moderation regression analyses.
The findings of this study indicated that non-monetary compensation practices were the best predictors of elevated intrapreneurial behaviour and that department‘s risk control did not moderate this relationship. However, it is unknown how the selection of industries will affect this study‘s findings.
In addition, desired compensation practices explained only 25% of the variance in elevated intrapreneurial behaviour, suggesting that compensation systems are not enough to elevate employees‘ intrapreneurial behaviour. Compensation systems should be an integral part of an overall entrepreneurial strategy of an organization.
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Keywords
Compensation, Entrepreneurship, Organisational performance