Handbook of Research on Strategic Human Capital Resources
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Handbook of Research on Strategic Human Capital Resources

Edited by Anthony J. Nyberg and Thomas P. Moliterno

Strategic human capital resources are a relatively new construct with a scholarly literature that is still evolving. Work in this area requires the integration of multiple theoretical perspectives and empirical approaches, but that integration rarely occurs. Within these pages, the editors have combined the voices of leading scholars from a wide range of disciplinary backgrounds to provide a comprehensive introduction to the current state of the field.
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Chapter 23: A pay system model for turning human capital resources into action

Anthony J. Nyberg and Greg Reilly


We propose a pay system model showing how three pay practice decisions – salary level, pay for performance (PFP) proportion, and the organizational level of PFP targets – affect human capital resources (HCRs) through sorting and incentive effects. The model also shows how the three pay practice decisions help utilize the HCR capacity to achieve desired outcomes. This addresses areas where research often underestimates the role that pay has in affecting the make-up or capacity of the HCR and the manner by which pay turns or enacts the HCR capacity into unit activity and performance.

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