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Best practice or best fit? High involvement management and base pay practices in Canadian and Australian firms

University of Saskatchewan, Canada

John L. Shields

University of Sydney, Australia, j.shields{at}econ.usyd.edu.au

Using survey data from 349 Canadian and Australian firms, this study examines, first, whether country per se makes a difference to base pay practice for non-managerial employees, and, second, whether firms reporting a high involvement management (HIM) style adopt a distinct approach to base pay configuration. Contrary to the convergence thesis, the results reveal significant inter-country differences, with Canadian firms accentuating job-based methods while Australian firms are more likely to use person-based practices. Contrary to best practice predictions, in neither country is HIM style a significant predictor of person-based base pay practices. Indeed, in Canada HIM style is strongly associated with job-based practices. In both countries, pay for personal skill/competency is associated chiefly with teamworking rather than with HIM style. Overall, these findings provide little support for the claimed ‘best practice’ association between HIM and person-based practices. They also highlight the continued importance of contextual/institutional factors and, hence, of ‘best fit’ considerations in firms’ choice of base pay practices.

Key Words: Australia • base pay • broadbanding • Canada • high involvement management • job evaluation • skill/competency pay

Asia Pacific Journal of Human Resources, Vol. 43, No. 1, 52-75 (2005)
DOI: 10.1177/1038411105050307


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