Research Summary
Scholars have long recognized the theoretical and practical implications of firm‐specific human capital. However, we highlight that firm‐specific incentives (i.e., worker incentives ...that provide more utility to workers in the focal firm than similar incentives available at other employers) provide an important pathway to competitive advantages that has not been comprehensively examined in the extant organizational research. We address this gap by (a) defining firm‐specific incentives and showing why they are different from incentive conceptualizations and typologies in the extant literature, (b) articulating potential origins of firm‐specific incentives, and (c) formally proposing the conditions under which firm‐specific incentives facilitate human capital‐based competitive advantages. In so doing, we develop a cohesive theoretical framework of incentive‐based competitive advantage that integrates across multiple literatures.
Managerial Summary
Just as companies differentiate their products by creating unique value for customers, they also create unique value for their employees. Some companies do this by offering employee incentives, perks, and benefits that are highly unique to the company and difficult for other companies to imitate. These unique incentives, perks, and benefits can help these companies to attract, motivate, and retain top talent at a financial discount and, accordingly, can help these companies realize competitive advantages over their rivals.
The strategic human capital conversation is a vibrant research area with many empirical opportunities. In this short editorial, we describe four key research areas that would benefit from empirical ...advancements: (1) perceptions of mobility prospects and firm-specific human capital theory, (2) firm-specific incentives, (3) emergence of the unit-level human capital resource, and (4) value creation and value capture issues in human capital research. We describe opportunities to validate certain measures, improve existing measures, develop new measures, and replicate initial findings.
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