This study examines the role of technological intensity in the choice of compensation policies and the influence of such policies on organization (market, productivity) and human resources performance (turnover, work climate, discretionary efforts). Using a survey of 252 Canadian firms, the authors show that technological intensity has a significant influence on compensation policies. A second survey of 128 Canadian organizations also demonstrates that technological intensity has a significant moderating effect on the association between several compensation policies and both human resources and organizational performance. More specifically, the authors find that greater emphasis on group performance plans and market pay is positively associated with productivity in high-technology firms. Extensive use of individual performance pay plans in high-technology firms is positively associated with turnover, whereas the use of group performance plans is negatively related to turnover.
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