Designing Remuneration Systems of Organizations for Sustainable HRM: The Core Characteristics of an Emerging Field

Abstract

Successful business trends in the 21st century cover new factors where economic viability and sustainability should address not only the economic criterion, but also the human managerial one. This leads to the creation of effective sustainable work systems including remuneration systems as a part of sustainable human resource management. The basic research object of sustainable work systems is work intensity, which covers many possible approaches including remuneration systems of organizations. Effective remuneration systems enhance the performance and contribution of employees by controlling labor cost, motivating employees and involving them in organizational processes. Nevertheless, there is a lack of evidence for the sustainability of both theoretical and empirical research of remuneration systems. This article pursues validating theoretical concepts related to sustainable human resource management (SHRM) and remuneration systems by empirical disclosure of the expression of SHRM principles in the characteristics of remuneration systems. The purpose of this paper is to reveal the characteristics of remuneration systems of organizations in real SHRM in enterprises in Lithuania. In order to achieve this, a qualitative study was conducted using semi-structured interviews with 21 corporate HR managers. The study empirically substantiated the relationship between the principles of sustainable human resource management and remuneration characteristics. Results disclosed that as many as 10 of the 12 SHRM principles allow to identify the remuneration system as a sustainable work system. All the identified characteristics of the remuneration system reveal various principles of SHRM through different features and indicators. Furthermore, it confirms the economic, social and environmental nature of sustainable remuneration systems.