Crises and Compensation: Exploring the Influence of External Crises on Employee Benefits Practices

Abstract: During the last years, the food retail industry in Sweden has been exposed to two crises; Covid-19 followed by rapid inflation. Except for organizational difficulties, these crises caused anxiety, lower well-being and decreased living standard among employees. It puts pressure on decision-makers to manage both operations as well as meeting employee needs in order to secure success. This study explores how highly uncertain and distinctive crises impact the decision-making process concerning employee benefit and employee management, where decisions lack prior experience and information. The study is of an interpretivist qualitative nature, wherein semi-structured interviews have been conducted on decision-makers. The research sample consists of 9 ICA owners with different sized stores, from various locations in Sweden. The data has been analyzed through an inductive approach by combining the Weick (1995) Sense-Making Model and Uzonwanne's (2016) Rational Decision-Making model. The findings provide novel insights of how highly uncertain crises transform decision-makers' sense-making processes and mindsets about employee benefits, elevating their importance and influencing subsequent decision-making strategies. The decision-making process is influenced by identity, organizational culture and previous experiences from Covid-19 which further act as extracted cues for decisions of the following crisis of inflation. All of which creates a continuous loop that will keep affecting future decisions regarding benefits. The study contributes to a decrease in the research-practitioner gap regarding reward systems by investigating decision-makers perspective. It also gives new insight into the decision-making process by developing on the crossroads of sense-making and decision-making.