This strategic compensation model based on contingency theory of organizations proposes that a fit between the organization's business environment and compensation system will affect the firm's performance (Rockmore, 1991; Rockmore and Scarpello, 1994). This proposition was tested with a set of Korean sample data of seventy-five publicly traded companies within thirty-four three-digit Standard Industrial Classification codes. The cluster analysis applied to the 7-item task environment uncertainty components resulted in two group classifications that face relatively ‘more certain’ and ‘more uncertain’ environments. Principal component factor analysis of the 8-item compensation system components resulted in three compensation system factors and subsequent cluster analysis classified firm pay plans into two clusters, which we labelled ‘more traditional’ and ‘more innovative’. Discriminant analysis confirmed the resulting classifications of both task environment and compensation system types. With both ROA and EPS measures, significantly more ‘fits’ (firms in stable environment that use traditional compensation system or firms in uncertain environment that use innovative compensation system) showed financial gains compared with ‘nonfits’. This financial impact of the contingency was more salient for those firms that face uncertain environment. The same results were obtained when ANOVA was performed.

The purpose of this study was to investigate the perceptions of teachers and administrators in a rural southeast school district regarding the impact of strategic compensation as a motivating factor on teacher quality, recruitment, and retention. As a result of increased demands on K12 education and the limited pool of teaching candidates, public school districts continue to search for ways to motivate, recruit and retain teachers (Muranto and Shuls, 2012). Since many view the traditional teacher salary scale as an outdated and ineffective practice, school districts continue to search for new ways to provide additional financial bonuses. (Springer, 2009). At the time of the study, the rural southeast school district studied was the only district within its state that used a strategic compensation model as a part of its employee benefits package. The locally funded plan awarded bonuses to teachers who qualify according to the parameters set by their school board. The initial rationale behind the implementation of the plan was to acknowledge exemplary teachers within the district. In this study, the history of the traditional salary scale, teacher quality, teacher retention, teacher recruitment, proponents and opponents of strategic compensation and recent studies on merit pay were examined. In this mixed methods study, a survey was sent to all 237 candidates eligible for strategic compensation, and a focus group interview with 7 administrators responsible for the summative evaluations of teachers was conducted. After the data were collected, descriptive statistics were examined to determine if additional ANOVA analyses were required to determine if demographic differences could be identified. The findings from this study may assist school districts develop and maintain a strategic compensation plan as a part of its overall teacher compensation package. After the data were disaggregated and analyzed, the findings from this study indicated mixed reviews regarding teacher perceptions of strategic compensation. Survey results indicate that the ideal bonus lies between $1,000-$3,000. In addition, teachers and administrators did not perceive that strategic compensation assisted with teacher recruitment or retention. Additional findings indicated differences in perceptions of strategic compensation based on gender and level of teaching assignment. / Doctor of Education / The purpose of this study was to investigate the perceptions of teachers and administrators in a rural southeast school district regarding the impact of a pay for performance plan as a motivating factor on teacher quality, recruitment, and retention. As a result of the teacher shortage in America, public school districts continue to search for ways to motivate, recruit and retain teachers. Since many view the salaries of teachers low, school districts continue to search for new ways to provide additional end of year bonuses as a motivating factor to improve teacher quality, recruitment and retention. To date, the rural southeast school district studied is the only district within its state that uses a strategic compensation model as a part of its employee benefits package. The plan awards bonuses to teachers who qualify according to their end of year rating. In this study, the history of the traditional salary scale, teacher quality, teacher retention, teacher recruitment, proponents and opponents of strategic compensation and recent studies on merit pay will be examined. A survey was sent to all 237 candidates eligible for strategic compensation, and a focus group interview with 8 administrators responsible for the summative evaluations of teachers was conducted. After the data were collected, they were sorted by demographic identifiers to determine if there were differences in responses between different groups. The findings from this study may assist school districts develop and maintain a strategic compensation plan as a part of its overall teacher compensation plan. The findings from this study include: $1,000-$3,000 is the ideal amount of money that would motivate a teacher to improve, strategic compensation did not assist with teacher recruitment, and school administrators did not believe strategic compensation led to greater teacher retention within the rural southeast school district. In addition, teachers and administrators believed that participation in the strategic compensation plan should be voluntary. Findings based on demographic identifiers indicated that male teachers responded more positively than female teachers, and there were differences among elementary, middle school and high school teacher responses with regard to their perceptions of the strategic compensation plan.