palkkiteoria

Palkkiteoria is a theoretical framework in economics and organizational theory that examines how compensation and rewards influence employee behavior, motivation, and performance. It covers wage setting, incentives, benefits, and non-monetary rewards within organizations, as well as broader labor market conditions.

The term palkkiteoria is a compound of Finnish words palkki (remuneration, salary) and teoria (theory). It is not a single, universally defined theory but a label used in Finnish-language literature to refer to models of compensation systems. Its usage varies, and authors may rely on different underlying models, such as efficiency wage theory, equity theory, or performance-based pay, under the umbrella of palkkiteoria.

Core concepts typically associated with palkkiteoria include pay structure design (base pay, bonuses, incentives), total compensation, pay equity, intrinsic motivation, and performance management. The theory also considers external factors like market benchmarks, collective bargaining, and legal constraints, as well as internal factors such as job design, skill requirements, and organizational culture.

Applications of palkkiteoria involve guiding human resources policy on compensation, designing incentive schemes aligned with organizational goals, and informing research on how remuneration affects retention, productivity, and job satisfaction. It often intersects with related theories such as expectancy theory and agency theory.

Criticism and limitations include the vagueness of the label, mixed empirical results on the relationship between pay and performance, and the strong influence of context. Cultural, sectoral, and organizational differences can significantly affect outcomes attributed to compensation systems.

See also: remuneration, wage theory, compensation, incentive theory, human resources management.