Rationalism
As noted, espoused theories of strategic compensation are all predicated on the notion of
strategic choice. Choice in the strategic sense involves decision-makers selecting those
compensation strategies and systems that are judged to be optimal through rational
deliberation. Weber, in his classic treatise on bureaucracy and authority, distinguished
between two forms of rationality necessary as preconditions of ‘ideal type’ bureaucracies
(Weber, 1924). Formative rationality was achieved when the best means to a given ends,
whatever that may be, were chosen. Referring to the ends themselves, substantive rationality
was achieved when the purpose itself was rational (ibid). In the language of contemporary
organisational behaviour, we might equate formative rationality with organisational processes
and substantive rationality with strategic purpose. The notion of the ideal type bureaucracy
and optimal strategic compensation investments share a lot in common. Both emphasise
management exercising rational choice over the ends, and the means through which those
ends are achieved as the route to economic maximisation in any given situation. In the
context of strategic compensation, rationality might therefore be thought of as (a) the