Remuneration and reward systems during an economic crisis: case study from Attica region, Greece

Abstract

This study investigated the structure of employees’ remuneration and rewards systems, focusing on medium- and large-sized firms in the region of Attica in Greece during the economic crisis. Data were collected using a structured questionnaire based on relevant literature. A sample of 150 companies filled out a total of 500 questionnaires. The results revealed that medium- and large-sized companies applied various remuneration systems, including the base wage, performance-related bonuses, and a combination of additional non-wage benefits. Greek firms did not avoid wage cut in times of low turnover, although hypotheses testing revealed no relationship between firm size and the use of flexible remuneration systems. However, a positive relationship between the unions’ engagement and the use of non-wage cutting strategies was confirmed. Furthermore, a positive correlation between wage rigidity, labor market legislation, and collective agreements for setting minimum wage levels was found. Finally, a hypothesis test regarding the association between the firm, the business sector, and wages cut over the last seven years was accepted. The study concludes that wages cut should be the final choice by firms since remuneration is a source to satisfy, engage, and attract employees.

Keywords

• economic crisis
• labor costs
• remuneration
• rewards systems
• wage rigidity