IDEAS home Printed from https://ideas.repec.org/a/nms/mamere/1861-9908_mrev_2005_01_rehu.html
   My bibliography  Save this article

Incentive Preferences of Employees in Germany and the USA: An Empirical Investigation

Author

Listed:
  • Marjaana Rehu

    (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management)

  • Edward Lusk

    (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management)

  • Birgitta Wolff

    (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management)

Abstract

This study investigates performance reward preferences of employees in Germany and the USA. The investigation uses the following three constructs: The Institutional Framework and its formal and informal implications for incentive compensation, Diminishing Marginal Utility of individuals related to performance rewards, and Incentive Schemes as motivational devices in organizations. Our empirical investigation is based upon survey data collected from employees of a MNC in Germany and the USA using an enriched form of Hofstede?s cross-cultural questionnaire. Our results show that employees from these countries have different preferences on incentives and further that incentive plans designed for one country might have non-motivating consequences in the other. We also find that the logic of diminishing marginal utility applies to certain rewards. Referencing these results, we suggest a method for organizations to develop effective and efficient incentive systems.

Suggested Citation

  • Marjaana Rehu & Edward Lusk & Birgitta Wolff, 2005. "Incentive Preferences of Employees in Germany and the USA: An Empirical Investigation," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(1), pages 81-98.
    • Handle: RePEc:nms:mamere:1861-9908_mrev_2005_01_rehu
    as

    Download full text from publisher

    File URL: https://www.nomos-elibrary.de/10.5771/0935-9915-2005-1-81
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Randall S Schuler & Nikolai Rogovsky, 1998. "Understanding Compensation Practice Variations Across Firms: The Impact of National Culture," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(1), pages 159-177, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vladimir Davydenko & Jerzy Kaźmierczyk & Gulnara Fatykhovna Romashkina & Elżbieta Żelichowska, 2017. "Diversity of employee incentives from the perspective of banks employees in Poland - empirical approach," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(1), pages 116-126, September.
    2. Baum, Matthias & Kabst, Rüdiger, 2013. "How to attract applicants in the Atlantic versus the Asia-Pacific region? A cross-national analysis on China, India, Germany, and Hungary," Journal of World Business, Elsevier, vol. 48(2), pages 175-185.
    3. Giapponi, Catherine C. & Scheraga, Carl A., 2007. "Industry Issue Paper: Cross-Cultural Factors and Corporate Governance Transparency in Global Airline Strategic Alliances," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 46(2).
    4. Vladimir Davydenko & Jerzy Kaźmierczyk & Gulnara Fatykhovna Romashkina & Elżbieta Żelichowska, 2017. "Diversity of employee incentives from the perspective of banks employees in Poland - empirical approach," Post-Print hal-01766506, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Victor Oltra & Jaime Bonache & Chris Brewster, 2013. "A New Framework for Understanding Inequalities Between Expatriates and Host Country Nationals," Journal of Business Ethics, Springer, vol. 115(2), pages 291-310, June.
    2. Biljana Bogićević Milikić & Nebojša Janićijević, 2009. "Cultural Divergence And Performance Evaluation Systems: A Comparative Study Of Three Serbian Companies," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 54(180), pages 40-56, January –.
    3. Patel, Parth & Bhanugopan, Ramudu & Sinha, Paresha & Prikshat, Verma & Boyle, Brendan, 2024. "Home country and firm-specific advantage influences on HRM replication versus adaptation in EMNEs operating in advanced economies: A qualitative comparative analysis," Journal of Business Research, Elsevier, vol. 170(C).
    4. Puck, Jonas F & Mohr, Alexander T & Holtbrügge, Dirk, 2006. "Cultural convergence through web-based management techniques? The case of corporate web site recruiting," Journal of International Management, Elsevier, vol. 12(2), pages 181-195, June.
    5. Robert Konopaske & Chet Robie & John M. Ivancevich, 2009. "Managerial Willingness to Assume Traveling, Short-term and Long-term Global Assignments," Management International Review, Springer, vol. 49(3), pages 359-387, June.
    6. Kiessling, Timothy S. & Richey, R. Glenn & Meng, Juan & Dabic, Marina, 2009. "Exploring knowledge management to organizational performance outcomes in a transitional economy," Journal of World Business, Elsevier, vol. 44(4), pages 421-433, October.
    7. repec:jtr:journl:v:4:y:2012:i:1:p:78-113 is not listed on IDEAS
    8. Antonio Bucchiarone & Simone Bassanelli & Annapaola Marconi, 2023. "How to Foster Sustainable Behaviors through Multi-Campaigns Rewarding Mechanisms: The AIR-BREAK Experience," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    9. Ozge Tayfur, 2013. "Convergence or Divergence? Evaluation of Human Resource Practices in Turkey," Journal of Economics and Behavioral Studies, AMH International, vol. 5(9), pages 625-638.
    10. Xiaoteng Ma & Ziyu Tang & Dan Wang & Hao Gao, 2020. "The Influence of Risk Culture on the Performance of International Joint-Venture Securities," Sustainability, MDPI, vol. 12(7), pages 1-21, March.
    11. Richards, Malika, 2000. "Control exercised by U.S. multinationals over their overseas affiliates: does location make a difference?," Journal of International Management, Elsevier, vol. 6(2), pages 105-120.
    12. Xiu, Zongfeng & Liu, Ran & Yin, Jingwei, 2022. "Confucian merchants culture, social movement and entrepreneurs’ political participation: evidence from China," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 795-821.
    13. Luis Alfonso Dau & Jiatao Li & Marjorie A. Lyles & Aya S. Chacar, 2022. "Informal institutions and the international strategy of MNEs: Effects of institutional effectiveness, convergence, and distance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1257-1281, August.
    14. Kyriakopoulos, Panagiotis & Herbert, Kendall & Piperopoulos, Panagiotis, 2024. "I am passionate therefore I am: The interplay between entrepreneurial passion, gender, culture and intentions," Journal of Business Research, Elsevier, vol. 172(C).
    15. Nishani Bourmault & Jordan Siegel, 2022. "Why Local Adaptation Sometimes Fails to be Effective for MNEs: Exploring the Dynamics of Collective Bonuses, Egalitarianism, and Informal Norms," Journal of Management Studies, Wiley Blackwell, vol. 59(4), pages 886-924, June.
    16. Anita Kyurova, 2019. "Local Adaptation Vs. Global Integration Of Pay And Rewards Practices Among Mncs," Entrepreneurship, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 7(2), pages 153-161.
    17. Kaufmann, Jeffrey B. & O'Neill, Hugh M., 2007. "Do culturally distant partners choose different types of joint ventures?," Journal of World Business, Elsevier, vol. 42(4), pages 435-448, December.
    18. Haka, Susan F. & Heitger, Dan L., 2004. "International managerial accounting research: A contracting framework and opportunities," The International Journal of Accounting, Elsevier, vol. 39(1), pages 21-69.
    19. Kostas Pappas & Alice Liang Xu, 2023. "Do foreign lenders' national cultures affect loan pricing?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 2006-2036, April.
    20. Aggarwal, Raj & Goodell, John W., 2013. "Political-economy of pension plans: Impact of institutions, gender, and culture," Journal of Banking & Finance, Elsevier, vol. 37(6), pages 1860-1879.
    21. Cordeiro Moreira, Jeíce Catrine & Lima, Gerlando A.S.F. & Góis, Alan Diógenes, 2019. "Effects of institutional factors on the accruals anomaly in Latin America," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 36(C), pages 1-1.

    More about this item

    Keywords

    Institutional Framework; Incentive Compensation; USA; Germany; Performance Rewards;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nms:mamere:1861-9908_mrev_2005_01_rehu. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nomos Verlagsgesellschaft mbH & Co. KG (email available below). General contact details of provider: http://www.nomos.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.