Title Page
Contents
ABSTRACT 8
Chapter 1. Introduction 10
1.1. Necessity for Pay-for-Performance Plans 10
1.2. The Increasing Popularity of Merit Pay 11
1.3. The 1997-98 Asian Financial Crisis and Merit Pay 12
1.4. Research Questions 13
Chapter 2. Literature Review 16
2.1. The Definition and Characteristics of Merit Pay 16
2.2. Merit Pay in South Korea 17
2.2.1. The Definition of Yeonbong-Je in terms of Merit Pay 17
2.2.2. The types of Yeonbong-Je implementation in South Korea 18
2.3. The Benefits of merit pay adoption 18
2.4. Two theoretical Perspectives Regarding Merit Pay 19
2.4.1. Psychological Theories 20
2.4.2. Economic Theories 22
2.4.3. Summary of the Theories 23
2.5. Empirical Research on the Effects of Merit Pay Adoption 24
2.5.1. On Individual-level Outcomes 24
2.5.2. On Organizational-level Outcomes 27
Chapter 3. Theory and Hypotheses 29
3.1. Merit Pay and Marginal Productivity Theory 29
3.1.1. Marginal Productivity Theory and Production Function 29
3.1.2. The Relationship of Pay-for-Performance Plans with Productivity 31
3.1.3. The Effects of Merit Pay Over Time 32
Chapter 4. Method 34
4.1. Data Source and Sample 34
4.2. Measures 35
4.2.1. Merit Pay Adoption 35
4.2.2. Organizational Productivity 36
4.2.3. Controls 36
4.3. Missing Data 37
4.4. Analysis 37
4.4.1. Latent Growth Modeling 37
4.4.2. Software packages 39
4.4.3. Model Evaluation Criteria 39
Chapter 5. Results 41
5.1. Descriptive Statistics 41
5.2. Unconditional Models 45
5.3. Conditional Models 50
Chapter 6. Conclusion and Discussion 54
6.1. Summary of the Study 54
6.2. Contribution and Implication 54
6.3. Limitations and Future Direction 56
References 58
국문요지 68
Table 1. Classification of pay-for-performance plans 17
Table 2. the effects of merit pay adoption on individual outcomes 26
Table 3. the effects of merit pay adoption on organizational outcomes 28
Table 4. Means, standard deviations, and missing rate of all variables 41
Table 5. correlations matrix of all variables 43
Table 6. Fit indexes for unconditional linear growth models of... 48
Table 7. Estimates for means, variances, and covariance of intercepts and... 49
Table 8. Estimates for means, variances, and covariance of intercepts and... 49
Table 9. Fit indexes for conditional linear growth models 51
Table 10. Estimates for regression weights of the conditional linear... 52
Table 11. Estimates for regression weights of the conditional linear... 53
Figure 1. The unconditional model of organization productivity (Model 1) 45
Figure 2. Unconditional model of organization productivity (Model 2) 46
Figure 3. Unconditional model of organization productivity (Model 3) 47
Figure 4. Conditional model of organization productivity (Model 3) 50