Applying evidence-based HRM: the case of bonuses in the home furnishing industry

Publication Date14 Oct 2014
DOIhttps://doi.org/10.1108/EBHRM-07-2012-0006
Pages192-208
AuthorAndré de Waal,Maarten Roobol
SubjectHR & organizational behaviour,Global HRM
Applying evidence-based HRM:
the case of bonuses in the home
furnishing industry
Andre
´de Waal
Maastricht School of Management, Maastricht, The Netherlands, and
Maarten Roobol
Erasmus University, Rotterdam, The Netherlands
Abstract
Purpose – In the home furnishing industry outside contract installers produce higher quality work than
in-house installers which is reflected in less revisits to customers to repair mistakes. Many home furnishing
retailers are therefore contemplating introducing so that the quality of the work of in-house installers will
be linked to financial incentives, thus resembling the situation of contract installers. However, a necessary
condition for a successful introduction of bonuses is that in-house installers are motivated by it to deliver
better quality work, i.e. cause less revisits. The purpose of this paper is to look into the question whether
the introduction of bonuses could be used to increase the quality of work of in-house.
Design/methodology/approach – For the research the four steps of the evidence-based HRM
framework, as developed by Rousseau and Barends (2011), were used. In steps 1, literature review, the
research question was formulated based on work motivation theories (in particular on intrinsic and
extrinsic motivation, bonuses, and the differences between contract workers and organizational
employees). In step 2, systematic gathering of facts, two existing questionnaires were combined to
measure the motivation of the two types of installers.
Findings – In step 3, evaluation, the differences between the motivational factors and attitude
towards bonuses was analysed for both groups of installers. The research results show that although
in-house installers are potentially motivated by bonuses, they differ so much from contract installers
in their general work motivation that introducing bonuses by no means will be a success. In step 4,
ethical considerations, the consequences of the research findings were discussed.
Research limitations/implications – The main limitations are the use of a self-constructed
questionnaire and the fact that the research was conducted at only one case company, thus rendering
the generalization of findings problematic.
Practical implications – The practical implication of the study is that management of the case
company can now better prepare itself for the issues to be expected when introducing bonuses for the
in-house installers.
Originality/value – This research adds to the literature on the effects of bonuses on motivation.
It also addresses a gap in the literature as there is currently hardly any academic literature on the
conditions necessary to introduce bonuses for craftsmen successfully,and on whether this introduction
is advantageous for organizations in the first place. In addition, the case company offered the
opportunity to research the issue in a comparative way, by looking at the motivational factors
influencing in-house installers and contract installers who work in the same conditions, something
which to the knowledge of the authors has not been done before. Finally, the sue of an evidence-based
HRM framework is quite unique for the human resource management field.
Keywords Employee motivation,Work performance and productivity, Bonuses, Evidence-based HRM,
Home furnishing industry, Promotion and compensation, Motivational work factors
Paper type Research paper
1. Introduction
The debate on the effects of bonuses on the performance of people keeps raging on
(Sikula, 2001; Pittman et al., 2008). In a recent article, de Waal and Jansen (2013) discuss
the divergence of opinion among academics and practitioners on this topic: on the one
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/2049-3983.htm
Received 30 July 2012
Revised 28 December 2012
19 March 2013
Accepted 22 March 2013
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 2 No. 2, 2014
pp. 192-208
rEmeraldGroup PublishingLimited
2049-3983
DOI 10.1108/EBHRM-07-2012-0006
192
EBHRM
2,2
side are proponents of bonuses who state that the use of bonuses and emphasis on
monetary rewards increases productivity and organizational performance. On the
other side, opponents of bonuses and monetary rewards state that these just have
detrimental effects on motivation and therefore the performance of people. From
de Waal and Jansen (2013), it becomes clear that the effects of bonuses might depend on
the specific circumstances in which and the specific purposes with which bonuses are
introduced. The present paper revisits the debate and examines suc h a specific context,
the home furnishing industry, using the evidence-based HRM framework developed by
Rousseau and Barends (2011).
Home Furnishing Ltd[1] is a home furnishing retailer with several stores where
carpet, laminate, vinyl, parquet, curtains, blinds and accessories are sold to consumers.
Home Furnishing Ltd is a family business with a strong reputation in the market of
home fabrics, and where currently the third generation of the family is in charge of the
operation. Home Furnishing Ltd has approximately 230 employees among which are
30 in-house installers. The reward system at Home Furnishing Ltd is based on function
and tenure; bonuses are not currently used. The organizational structure of Home
Furnishing Ltd is a flat organization with a centralist, hierarchical management (Figure 1).
Home Furnishing Ltd has a tur nover of 25 million Euros, consisting of 50 per cent
laminate, 20 per cent curtain and 30 per cent of other product sales (such as carp ets and
vinyl). The target customers of Home Furnishing Ltd are families with an average
income. Home Furnishing Ltd has an installation service on offer to its customers,
which is carried out by both, in-house installers and contract installers. Home
Furnishing Ltd is currently dealing with the issue that the quality of work delivered
by its in-house installers is not as good as that of the contract installers they hire.
Therefore, Home Furnishing Ltd’s management was willing to cooperate in this
empirical case study, because it wanted to find out whether the introduction of bonuses
could lead to higher quality work by the in-house installers. This represents the focal
point of our analysis.
In the home furnishing indus try, there are installers who are employees of a home
furnishing company (further on called : in-house installers) and installers who work on
a contract basis (further on called: contract installers). In general, contract installers,
who are self-employed, deliver higher quality work than in-house installers, as they
create less damage and complaints resulting in fewer revisits to fix problems. The
in-house installers who work at Home Furnishing Ltd cover approximately 92,700
square metres per year. However, 4.6 per cent (4,300 square metres) of these metres are
actually revisits. In comparison, contract installers hired by Home Furnishing Ltd
cover 47,300 square metres and only have a revisit percentage of 2.7 per cent.
Management of Home Furnishing Ltd.
Construction department Financial administration
Purchase and
Marketing
IT and
Logistics Warehouses Installers Order
administration
Service
and Planning Sales
32 stores
Figure 1.
Organizational structure
of Home Furnishing Ltd
193
Applying
evidence-based
HRM

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