Teaching compensation system principles to undergraduate students who have limited practical experience can be challenging. We describe an exercise that puts students in the roles of compensation system designer and organization employee. This one-session exercise prompts students to create a compensation system for a fictitious paper airplane organization, then work as an employee (i.e., make paper airplanes). The exercise is particularly useful for demonstrating the sorting and incentive effects of compensation systems. This exercise is intended for undergraduate students in a human resource management or compensation course.
CadsbyC. B.SongF.TaponF. (2007). Sorting and incentive effects of pay for performance: An experimental investigation. Academy of Management Journal, 50(2), 387–405. https://doi.org/10.5465/amj.2007.24634448
2.
ConroyS. A.GuptaN. (2016). Team pay-for-performance: The devil is in the details. Group & Organization Management, 41(1), 32–65. https://doi.org/10.1177/1059601115607746
3.
ConroyS. A.YoonY. J.BambergerP. A.GerhartB.GuptaN.NybergA. J.ParkS.ParkT.-Y.ShawJ. D.SturmanM. C. (2015). Past, present and future compensation research perspectives. Compensation & Benefits Review, 47(5–6), 207–215. https://doi.org/10.1177/0886368716681677
4.
DownesP. E.ChoiD. (2014). Employee reactions to pay dispersion: A typology of existing research. Human Resource Management Review, 24(1), 53–66.
GerhartB.FangM. (2014). Pay for (individual) performance: Issues, claims, evidence and the role of sorting effects. Human Resource Management Review, 24(1), 41–52. https://doi.org/10.1016/j.hrmr.2013.08.010
7.
GerhartB.FangM. (2015). Pay, intrinsic motivation, extrinsic motivation, performance, and creativity in the workplace: Revisiting long-held beliefs. Annual Review of Organizational Psychology and Organizational Behavior, 2(1), 489–521. https://doi.org/10.1146/annurev-orgpsych-032414-111418
8.
GerhartB.RynesS. (2003).Compensation: Theory, evidence, and strategic implications. Sage.
9.
GuptaN.ShawJ. D. (2014). Employee compensation: The neglected area of HRM research. Human resource management review, 24(1), 1–4.
10.
KerrS. (1975). On the folly of rewarding A, while hoping for B. Academy of Management Journal, 18(4), 769–783. https://doi.org/10.5465/255378
11.
MahandT.CaldwellC. (2023). Quiet quitting–causes and opportunities. Business and Management Research, 12(1), 9–19.
