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Flexible Rewards From a Strategic Rewards Perspective Xavier Baeten and Bart Verwaeren Compensation & Benefits Review 2012 44: 40 DOI: 10.1177/0886368712445541 The online version of this article can be found at: http://cbr.sagepub.com/content/44/1/40

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Flexible Rewards From a Strategic Rewards Perspective

Compensation & Benefits Review 44(1) 40­–49 © 2012 SAGE Publications Reprints and permission: sagepub.com/journalsPermissions.nav DOI: 10.1177/0886368712445541 http://cbr.sagepub.com

Xavier Baeten, Head Vlerick Reward Centre, Vlerick Leuven Gent Management School, and Bart Verwaeren, Researcher, Vlerick Leuven Gent Management School

Abstract Flexible reward arrangements (e.g., flexible benefit plans) have been around for a rather important period of time. Although some authors have examined the antecedents and consequences of adopting such plans from a theoretical perspective, empirical studies are rather scarce. Furthermore, there is a need to apply a strategic rewards perspective to flexible reward plans in order to help firms to move from “best practice” toward “best fit.” This article interprets the results of a survey held in Belgium and the Netherlands regarding the prevalence and perceived outcomes of adopting flexible reward plans within a model of strategic alignment of reward management. Keywords flexible benefits, employee benefits, reward strategy

Introduction Since the 1970s, flexible benefit plans have slowly emerged, first in the United States, later in Europe and the rest of the world. Early figures from the United States report around one third of companies offering flexible benefits.1 A 2012 survey found that more than 50% of U.K. employers are offering some form of flexible benefits.2 Other literature reports an adoption rate of a little less than 40% in the Netherlands.3 However, it is difficult to determine their popularity, as different studies use different definitions. The most important drivers for the adoption of flexible reward plans include institutional pressures and expected efficiency gains.4 Institutional pressures include the legal framework (e.g., tax treatment), unions’ preferences and competitors’ practices. Considerations regarding efficiency gains include the plan’s cost, employee preferences and impact on the attractiveness of the employer. Another commonly cited advantage of flexible benefits includes their educational role: When employees have to make a conscious choice on which reward/benefits elements to include in their package, they will appreciate the content and the value of their benefits better.5 A final reason is related to mergers and acquisitions and takes a cost management perspective. If two firms with different benefits packages merge, adding up all the benefits might prove to be a costly solution. On the other hand, taking away some of the benefits might affect employee motivation. Therefore, a solution is to keep all the benefits but to ask employees to make choices within a predetermined budget. This enables them

to keep the benefits they appreciate most, and it will also increase their awareness. Examinations of flexible benefit plans show huge differences in their design. In some cases, flexible systems are limited in span, with only a small portion of benefits in scope of the plan. For example, some organizations allow the opportunity to “trade” overtime for extra pay or extra holidays. Other companies allow employees to choose the payout form of their bonus (e.g., cash, pension plan contribution and shares), the size and features of their leasing car, the value of their pension plan, their life insurance coverage and so on. Going one step back, it is striking how little consideration is given to the role of reward strategy and the alignment with the business context for the adoption and design of flexible reward plans. The term reward strategy can be defined as “a declaration of intent, which establishes priorities for developing and acting on reward plans that can be aligned to business and HR strategies and to the needs of people in the organization” (p. 30 in Armstrong & Murlis, 2004).6 The first objective of this article is to propose a model of strategic reward management and apply it to the issue of Head,Vlerick Leuven Gent Management School Researcher,Vlerick Leuven Gent Management School Corresponding Author: Xavier Baeten,Vlerick Leuven Gent Management School, Reep 1, 9000 Ghent, Belgium Email: [email protected]

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Baeten and Verwaeren flexile reward plans. An analysis of earlier research and data from a survey that was conducted by the Centre for Excellence in Strategic Rewards7 is used to support the proposed arguments. This survey was addressed to compensation and benefits professionals and focused both on their opinions and on actual business practice. We first provide information about the survey methodology. The results of this survey will be integrated throughout this article.

Survey Methodology Questionnaire Development To increase insights into the prevalence and perceptions of flexible reward plans, a survey was developed and sent to compensation and benefits managers in Belgium and the Netherlands. The sample is described in Box 1. The first part of the questionnaire tried to capture perceptions and opinions regarding flexible reward plans. The second part was designed to measure the degree of flexibility in rewards that is actually provided by a company.

Figure 1. Sample description: Industry

Survey Sample The survey was completed by reward managers or HR managers from 51 different companies (multiple respondents from the same company were removed prior to analysis). Respondents were recruited from two research and networking organizations in the field of reward management and alumni of a compensation and benefits management program at a European business school. All companies are located in Belgium or the Netherlands (Belgian or Dutch subsidiaries of multinational organizations could also participate). Various industries were represented, including engineering, energy, HR services, financial services, insurance, transportation, postal services and telecommunication. The sample was predominantly made up of large organizations counting more than 1,000 full-time equivalent employees. However, also a number of mediumsized firms were included. See Figures 1 and 2.

A Framework for Classifying Flexible Reward Plans Generally, the terminology of flexible benefit plan or cafeteria plan is used to describe all compensation models in which employees are allowed to make choices about the benefits they receive.8 In this text, however, we prefer the term flexible reward plan, going beyond choice in benefits but also including other reward elements such as holidays.9 Table 1 gives an overview of the choices that can be made in flexible rewards. The general philosophy is that

Figure 2. Sample description: Company size

there are sources to feed the system and goals, which are the choices (i.e., the spending) made by the employees. Theoretically, all possible trades can be made. A recent trend is that in addition to these four cells, an increasing number of firms are offering flexibility with regard to mobility elements of the reward package. For example, this is about giving the possibility to opt for a company car in a lower category, together with a season ticket for public transport. Therefore, mobility-related trades are considered to be a separate cell. All items that were included in the survey are listed in Table 2.

Determinants of Flexible Reward Plans Some of the research on flexible reward plans has focused on the antecedents of flexible reward systems. From a strategic rewards perspective, reward structures and systems should be aligned with the business context. Translating this into flexible rewards, companies can differ in their adoption and in the design of these flexible reward plans depending on organizational contingencies.

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Table 1. Taxonomy of Trades

Source Financial     

Time

Goal

 

Financial

Time

Financial source for financial goal   Annual bonus in pension plan   Annual bonus in shares

Financial source for time goal   End-of-year premium for extra holidays   Annual bonus for sabbatical   Base pay for part-time work schedule Time source for time goal   Saving holidays for sabbatical   Saving holidays for early retirement

  Base pay in medical insurance Time source for financial goal   Holidays for pay (“selling” holidays)   Overtime for pay

In this section, first, a framework of strategic rewards is presented. By applying this framework to the issue of flexible rewards adoption and design, it can be used as a tool to guide the strategic policy-making process.

A Model for Strategic Rewards The framework that is presented in Figure 3 (i.e., the Vlerick Strategic Rewards Model) assumes that differences in flexible reward plans can be attributed to differences in reward strategies, be it a conscious or implicit strategy. In turn, an organization’s reward strategy is influenced by the various environments in which it is conceived. The company’s internal environment is an important contingency factor and contains organizational aspects such as organizational culture, structure and business strategy. These, subsequently, are influenced by the external environment in which an organization operates, including the legal and tax regulations, the labor market and the competitors in the industry. However, this external environment might also directly shape the reward strategy. In some countries, there are a lot of restrictions that make flexible rewards less popular. Central to the model is the proposition that the effectiveness of reward structures and systems is dependent on the alignment of the environment(s) and the reward strategy. The relationships between these concepts are summarized in Figure 3. Following this reasoning, the internal and external environments of an organization (i.e., the business context) contain the factors that drive the decisions regarding rewards and their layout. In what follows, these antecedents are investigated from the perspective of flexible rewards. Relying on earlier research and survey

Table 2. Overview of Possible “Trades” in a Flexible Reward System Time for time • “Saving” vacation days for a sabbatical • “Saving” vacation days for earlier retirement Financial for time • Fixed pay for extra vacation days • Variable pay for extra vacation days • Benefits for extra vacation days Time for financial • Vacation days for extra cash • Overtime for extra cash • Vacation days for extra benefits • Overtime for extra benefits Financial for financial • Possibility to invest a budget in a selection of benefits or cash • Pension plan for cash (or vice versa) • Cash for stock-based reward (or vice versa) • Pension plan for life insurance (or vice versa) Mobility • Choosing between car (allowance) and “mobility budget” (e.g., smaller car for season ticket public transport; choice between car, bike, public transport etc) • Smaller car for other benefits or cash • Bigger car (or more options) for cash • Fixed pay (cash) for car

data, the next sections attempt to identify all relevant factors that should be considered while making this decision.

External Environment The external environment encompasses several elements that can influence the reward strategy, policy and procedures. In this respect, Barringer and Milkovich10 identify two main groups of influences that should be taken into account when implementing flexible reward plans. The first factor is the practice of the other companies in the same industry. Many reward practices (and other management approaches) have an epidemic trend, in the sense that companies are copying their close competitors in order not to be left behind. For example, practically all IT consulting companies offer a company car as part of the package, even to more junior consultants. Competitors that initially would not be likely to include a company car in their package could miss out on a competitive advantage (or even condition) in recruiting young talents. This can also be applied to flexible reward plans. The more competitors in one industry adopting a flexible reward plan, the higher the pressure will be for others to conform to this norm. In the Netherlands, for example, the first companies to adopt flexible benefit plans were

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Figure 3. A model for strategic reward management

financial services institutions. Even today, the financial sector leads the flexible benefits charts with about 60% of companies offering them, compared with an average of 43%.11The second external force that influences the prevalence and design of flexible reward plans is the legal and fiscal framework in which a plan is created. As deviations from the legal norm are usually not possible, these forces should have an explicit impact on both prevalence and design of flexible rewards. It should be noted that industry and legal influences can be intertwined, through the development of collective labor agreements on an industry level. The differences in health care benefits between the United States and Europe constitute a clear example of the effect of the external environment. Because of different policy approaches to health care arrangements, basic health care coverage is arranged collectively in Europe. As a result, whereas health care–related benefits are very central in benefit plans in the United States, these benefits are not prevalent in European reward packages (with exception of hospitalization insurance).

Survey Results Based on our survey data, it is possible to isolate some of the influences of the external environment, both through figures regarding the prevalence of flexible reward plans and through compensation and benefits managers’ perceptions of these influences.

Energy Services Financial Industrial 0%

10%

20%

30%

40%

50%

Figure 4. Average percentage of companies that offer flexibility in rewards per industry

Prevalence Our own data are in line with an industry effect. Figure 4 shows the total average prevalence of flexible rewards per industry group. Explicit differences can be observed, indicating an industry effect. Flexible rewards are more popular in real estate, telecom and energy sectors. Our survey data provide opportunity to investigate the impact of different legal and fiscal frameworks, because the sample consists of Belgian and Dutch companies. The first observation is that, in general, flexible reward plans are much more prevalent in the Netherlands than in Belgium. Both countries’ legal contexts contain some stipulations that very distinctly influence flexible rewards. For example, Belgian labor law limits the transfer of holidays over a longer time frame, whereas Dutch law explicitly

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The Netherlands

80% 60%

30%

40%

20%

20%

10%

0%

Belgium

40%

0% TforT

MforT

TforM MforM Mobility

TforT

MforT

TforM MforM Mobility

Figure 5. Percentage of firms that offer flexibility in rewards in the Netherlands and Belgium

Note. TforT = time source for time goal; MforT = financial source for time goal; TforM = time source for financial goal; and MforM = financial source for financial goal; see Table 1 for an explanation of these categories

states that holidays can be saved up to 5 years in order to allow employees to take a sabbatical. This difference can clearly be observed in Figure 5. Saving “time for time” is the single most popular element in a flexible rewards plan in the Netherlands and the least popular for Belgian companies.12 On the other hand, flexibility in the field of mobility is relatively high in Belgian companies and relatively low in Dutch ones, compared with the other ingredients of a flexible rewards policy. The high score concerning mobility is mostly related to flexible arrangements regarding company cars. Belgium and the Netherlands have very different tax regimes for company cars, the Belgian one being more favorable toward cars than the Dutch system at the moment of the survey. The external influence of the legal and tax framework is also confirmed by reward managers’ perceptions. When asked whether the tax treatment hinders the adoption of a flexible reward plan, the responses are diverse. Further analysis shows that this diversity is almost entirely accounted for by the country in which the organization is located, with Dutch companies being confronted with a more favorable tax context compared with their Belgian counterparts. It can be concluded that the government, by the means of labor law, social security and tax law, has an important impact on the prevalence and design of flexible rewards. At the same time, this means that the government should be aware of future developments in the labor market and the needs that are associated with this (e.g., diversity), so as to provide firms with a facilitating framework. In our opinion, this is a challenge for governments and their political leaders.

Perceptions The graying of the population is considered to make the labor market tight and to increase the attention that has to

be paid to recruitment and retention issues. Compensation and benefits managers indicate that flexible rewards are explicitly aimed at improving the attractiveness of the organization as an employer. Figure 6 shows that the majority of surveyed reward managers indicate that flexible reward plans have a positive influence on the attractiveness of the organization. In addition, it is specified that flexible reward plans will be necessary to compete in the labor market of the future. Additionally, an important role can be played by unions, industry representatives and other actors in negotiations on collective labor agreements. Apart from the sector and the regulatory context, it should be acknowledged that the firm’s suppliers in the field of compensation and benefits can also have an impact on the degree to which flexible rewards are established. The availability of good administrative tools is vital in this respect. Also, insurance companies might be less favorable toward providing some employees with specific insurances rather than having a common product for the whole workforce. External factors seem to play a major role in shaping reward systems. Nevertheless, not all organizations within one region and industry have the same practices regarding their reward packages. These differences point to another relevant group of influences, which originate in the internal environment.

Internal Environment The internal business environment encompasses a number of characteristics that have a direct influence on how the reward strategy is shaped. The role of culture, the company’s business strategy, and the HR environment are all factors that are related to the internal environment and that should be taken into account when making the decision whether or not a flexible reward plan could be a viable option for a specific organization.13

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Figure 6. Reward managers’ perceptions of flexible rewards’ outcomes (1)

In the following paragraphs, we will discuss the link between the elements of the internal environment that possibly relate to the adoption and design of flexible reward plans, more specifically (a) culture, (b) strategy, (c) structure, (d) HR environment, (e) size and (f) organizational performance. Culture. Distinguishing between different organizational cultures can be done on several dimensions. One dimension is the traditional-involvement dimension. A traditional culture implies a clear division of labor, vertical communication, top-down decision making, strong allegiance to the employer and the use of control systems. An involvement culture, on the other hand, implies a loose division of labor, lateral communication, shared decision making, emphasis on risk taking, allegiance to the profession and the use of feedback systems.14 Aligning reward systems with organizational culture implies making sure that the reward systems communicate the same values as the companies’ prevailing culture. The cultural values communicated by a flexible reward system can be somewhat different depending on what sort of flexibilities are offered. However, they would always fit best with an involvement-type culture, more than with a traditional culture. Strategy. The internal environment is also strongly shaped by the organization’s business strategy and related HR strategy, and the reward system must be aligned with these.15 Business strategies can be classified as cost leaders, differentiators or innovators. Whereas cost leaders focus on efficiency, differentiators will develop a unique value proposition that sets them apart from competition. Innovators go even further and aim to avoid competition altogether by developing new products or services that are superior to anything the competition has to offer.16 As decreased efficiency and a higher administrative burden are associated with flexible reward plans, it can be expected that the fit with this type of strategic orientation will be poor and that flexible rewards will be less prevalent in firms with a cost leadership strategy.

Differentiators, seeking to stimulate high commitment through HR practices, could find a flexible reward plan fitting well with their business strategy. By allowing matching of reward packages to employees’ specific needs, these companies could increase the necessary employee engagement in order to differentiate themselves from their competitors. With their focus on attraction and retention of highskilled employees, there seems to be a natural fit between an innovation business strategy and flexible reward plans. Furthermore, reward systems in a firm with an innovation strategy are marked by a more open and decentralized administration, generally higher wages and broader salary bands to offer more flexibility. The pay philosophy adopted by innovators implies a strong emphasis on how reward packages are perceived and appreciated by the employees.17 These are all arguments for providing flexible rewards. Structure. Companies can organize their activities in different ways. Several definitions can be provided to differentiate between organizational structures. One way is to differentiate between mechanistic and organic structures. Mechanistic structures are characterized as highly formalized, centralized and standardized and with a narrow span of control. In contrast, organic structures are characterized as low in formalization, centralization and standardization and with a wide span of control.18 As a flexible reward plan implies an extreme form of decentralization of reward package design (to the level of the individual employee) as well as a lack of standardization, it would probably not fit well with a mechanistic structure. For the same reasons, it seems an organic structure would be much more adapted to implement a flexible reward plan. HR environment. Organizations can find themselves in different stages of HR maturity and some of these HR mindsets are more open to innovative HR practices, such as flexible reward plans, than others. Baird and Meshoulam19 describe five stages (initiation, functional growth, controlled growth, functional integration and

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Associated Benefits of Flexible Reward Plans

.30 .25 .20 .15 .10 .05 .00 Large (+1000 FTE)

Medium (500-1000FTE)

Small (-500 FTE)

Figure 7. Flexibility in rewards in companies of different sizes

strategic integration) through which organizational processes are evolving, including HR components. Although it is beyond the scope of this text to discuss all stages and their HR implications, it is important to note that a certain level of HR “maturity” is needed before an organization can implement a flexible reward plan. A company should at least be at a stage of controlled growth, which is characterized by an increase in professionalization of management, to start implementing flexibility in rewards. On the HR level, this stage is typified by a dedicated HR department and management and an awareness of the internal and external environment.20 These elements are essential to work in a strategic rewards perspective. The role of size and organizational performance of the company. Both size and recent organizational performance of a company can influence the adoption and design of reward practices. In this respect, large, successful, organizations have more means, both from a financial and human capital perspective, to develop and implement highly professionalized reward systems. Flexible rewards can be considered to be one of these. This is also reflected in Figure 7. An important deterrent from implementing flexible reward plans is the extra workload for the HR administration and the associated extra costs, which might be brought about by these plans. However, the administration of flexible rewards seems to be more and more facilitated by software applications. Indeed, our survey data show that 65% of reward managers in the sample stated that flexible rewards lead to a high administrative burden (Figure 8). A more detailed analysis shows that reward managers working in an organization that has a flexible reward plan perceive the administrative burden as less problematic. This might mean that a fear of this extra workload is unwarranted. A way of reducing the administrative workload is to allow employees to choose between packages of pay and benefits, instead of letting them freely adjust several reward variables. As could be expected, 81% of reward managers in the survey indicate that this would be an interesting approach to increase flexibility in rewards.

In addition to the external and internal environments, the proposed model of strategic reward management contains another important aspect that has not been discussed yet—namely, the outcomes of the reward systems. The purpose of every management system, and thus every reward system, is to produce beneficial results for the organization. In this way, the perceptions of (expected) positive results are an important driver in adopting flexible reward plans. Furthermore, the (actual) results associated with a specific reward system can be interpreted as a feedback loop of the state of the alignment between the internal and external environment and the reward strategy and systems. If results are not satisfactory, this would indicate that the fit between these contingencies is not optimal and one or several of the factors should be adjusted. Potential results of flexible reward systems relate to employee satisfaction, employee attraction and retention and employee performance and motivation. The reward managers’ expectations concerning these issues are summarized in Figure 9 and are discussed in the following sections, as well as the very scarce empirical literature. Employee satisfaction. In general, the results show that employees are thought to prefer flexible rewards over nonflexible rewards and would be more satisfied with them. These perceptions support (scarce) research evidence showing that employees are more satisfied with benefits if they are offered in flexible benefit plan. Overall job satisfaction also was slightly higher after implementation of the flexible plan.21 Based on the results of our survey, it seems like the design of the flexible reward plan determines employee satisfaction. For example, reward managers indicate that employees would be less positive when offered choice among packages of rewards as opposed to a “full” flexibility system, in which all elements can be substituted. Furthermore, compensation and benefits managers indicate that flexible work–life benefits are appreciated the most, followed by flexible mobility plans. Choice regarding the payout of a bonus is thought of as much less appreciated by employees, although on average there is still a positive association. Flexibility regarding insurances (hospital insurance, life insurance etc.) is less appreciated, with only 44% of reward managers indicating that employees would actually appreciate such a choice. Employee attraction and retention. A staggering 86% of compensation and benefits managers agree that flexible rewards will increase their company’s attractiveness as an employer. On the other hand, “only” 65% of surveyed managers believe flexible reward plans to have a positive effect on retention. This difference is remarkable, as the primary

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Figure 8. Reward managers’ perceptions of flexible rewards’ outcomes (2)

Figure 9. Reward managers’ perceptions of employees’ preferences

recipients of such a plan are the current employees and it might be more difficult to let potential employees fully appreciate the benefits of a flexible reward plan. This argument highlights the importance of good communication or rewards, to current and future employees. A recent Chinese study confirms the impact of flexible benefit plans on both attraction and retention. Results of this research show that having a flexible benefit plan is related to fewer problems in attracting new skilled employees and to lower employee turnover.22

Conclusions Too often, reward practices are implemented solely because they are considered to be the next best practice, in an attempt to increase tax efficiency, and/or because other firms in the sector apply them. In contrast, the main goal of this article was to highlight whether and how flexible rewards should be embedded in and driven by the firm’s external and internal business contexts. This would imply not only that a strategic reward management perspective is needed to guide decision making about flexible reward plans but also that flexible rewards are an important tool from a strategic rewards perspective. The elements of a strategic view on flexible rewards are depicted in Figure 10.

This perspective implies that the introduction of a flexible reward plan (and the design of this plan) will be contingent on several factors. The role of the legal and fiscal framework and practices by competitors are considered important factors of the external business context. Also in the internal environment, several issues should be considered. Not only the culture and structure but also the business strategy and broader HR environment should be taken into account and will have an impact on whether or not to implement (different types of) flexible rewards. Prioritizing between each of these factors belonging to the business context is an important task for the firm’s management. Turning to the expected outcomes, there remains a significant challenge to identify how and under which circumstances flexible reward plans yield valued outcomes. In this text, we have mainly based conclusions on reward managers’ perceptions of effects. Although this is a valuable approach, more rigorous empirical research is needed to determine the outcomes of flexible reward plans. As a final conclusion, this article has made clear that flexible rewards are not a passing fad. On the contrary, they should be considered from a strategic reward management perspective before deciding on their implementation.

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Figure 10. A strategic reward perspective of flexible reward plans

Declaration of Conflicting Interests The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding The authors declared the receipt of the following financial support for the research, authorship, and/or publication of this article: The research which is reported in this article was conducted by the Centre for Excellence in Strategic Rewards. This is an academic research centre funded by the business community.

Notes   1. Barringer, M. W., & Milkovich, G. T. (1998). A theoretical exploration of the adoption and design of flexible benefit plans: A case of human resource innovation. Academy of Management Review, 23, 305-324.  2. Aon Hewitt (2012). Employee remuneration trends 2011/2012. Retrieved from http://www.aon.be   3. Benders, J., Delsen, L., & Smits, J. (2006). Bikes versus lease cars: The adoption, design and use of cafeteria systems in the Netherlands. International Journal of Human Resource Management, 17, 1115-1128.

  4. Barringer and Milkovich (1998).   5. Perkins, S. J., & White, G. (2011). Reward Management: Alternatives, Consequences and Contexts (2nd ed.). London: CIPD Publishing.  6. Armstrong, M., & Murlis, H. (2004). Reward management: A handbook of remuneration strategy and practice (5th ed.). London, England: Kogan Page.   7. The Centre for Excellence in Strategic Rewards is part of the Vlerick Leuven Gent Management School. It conducts applied research in the field of strategic rewards and provides trainings in the field of Compensation and Benefits Management. It has close contacts with and is supported by 40 large companies.   8. Beam, B. T., & McFadden, J. J. (1996). Employee benefits. Chicago, IL: Dearborn Financial.   9. Benders, Delsen, and Smits (2006). 10. Barringer and Milkovich (1998). 11. Hillebrink, C., Schippers, J., Doorne-Huiskes, A., & Peters, P. (2008). Offering choice in benefits: A new Dutch HRM arrangement. International Journal of Manpower, 29, 304-322. 12. Belgian companies can allow the transfer of seniority days, so some limited flexibility is possible. 13. Heneman, R. L., & Dixon, K. E. (2001). Reward system alignment. Compensation and Benefits Review, 33, 18-29.

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Baeten and Verwaeren 14. Heneman and Dixon (2001). 15. Heneman and Dixon (2001). 16. Montemayor, E. F. (1996). Congruence between pay policy and competitive strategy in high-performing firms. Journal of Management, 22, 889-908. 17. Montemayor (1996). 18. Heneman and Dixon (2001). 19. Baird, L., & Meshoulam, I. (1988). Managing two fits of strategic human resource management. Academy of Management Review, 13, 116-128. 20. Baird and Meshoulam (1988). 21. Barber, A. E., Dunham, R. B., & Formisano, R. A. (1992). The impact of flexible benefits on employee satisfaction: A field study. Personnel Psychology, 45, 5575 22. Lin, Z., Kelly, J., & Trenberth, L. (2011). Antecedents and consequences of the introduction of flexible benefits plans in China. International Journal of Human Resource Management, 22, 1128-1145.

Bios Xavier Baeten established the Research Roundtable Employee Benefits. He broadened the research scope of this centre into strategic rewards in 2000. In 2006, he established the Executive Remuneration Research Centre. Today, he is head of the Vlerick Reward Centre, which has long-term collaborations with more than 40 firms participating in the centre’s research and workshops. The Centre also provides executive education programs in the field of strategic rewards and executive remuneration. He also serves as an independent member of various remuneration committees. Bart Verwaeren holds a master’s degree in industrial/ organizational psychology from Ghent University and currently works as a researcher at the Vlerick Leuven Gent Management School, Belgium. His research interests include strategic reward management and the behavioral impact of rewards. He is presently preparing a PhD on the relationship between reward characteristics and employee innovation.