Organizational learning and compensation strategies: Evidence from the Spanish chemical industry

This study explores the role of compensation strategies in promoting organizational learning capability. By analyzing a sample of 111 Spanish firms from the chemical industry, the authors highlight how compensation strategies can be used to influence employees' commitment to learning and shape their understanding of the overall purpose of the organization. They also show that inappropriate strategies can lead to short-term efficiencies but damage longer-term learning. The study also explores five dimensions of compensation strategy that are linked to organizational learning: job-based vs. skill-based pay; pay level relative to the market; fixed pay vs. incentives; individual vs. group incentives; and shortvs. long-term orientation. © 2007 Wiley Periodicals, Inc. Reprinted from Human Resources Management Volume 44, Issue 3.