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

Abstract

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.