Country-Compatible Incentive Design

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Dezember 2007



Based on an empirical study among employees of a multinational corporation (MNC) in Germany and the USA, Marjaana Gunkel shows that the employees in these countries have different preferences regarding incentives and that incentive plans designed for one country are not always effective in others. In addition, the author presents an explorative study of employee groups in China and Japan and gives advice for designing appropriate compensation schemes for employees of MNC in different countries.


Cross-national differences in performance reward preferences

Employee motivation and institutional frameworks

Analyzing incentives in a multinational corporation

Retaining and motivating employees in Germany and the United States

Diminishing marginal utility of performance rewards

Exploratory comparison of performance reward preferences in China, Germany, Japan and the USA


Dr. Marjaana Gunkel ist wissenschaftliche Mitarbeiterin von Prof. Dr. Birgitta Wolff am Lehrstuhl für Betriebswirtschaftslehre - Internationales Management - der Otto-von-Guericke-Universität Magdeburg.


Employee Motivation and Institutional Frameworks- A Literature Review (p. 7-8)

Starting from the 1960s researchers have shown great interest in motivation. Along with research in areas such as Human Resource Management and Organizational Be- havior employee motivation has become a fascinating research topic also for Man- agement academics. The research focus has been placed on the motivation process of employees as well as on the rewards which individuals find motivating. Further, some research has been conducted on finding out the differences in employee motivation in different countries. The following subsections cover some major motivation theories and their applicability in different countries as well as discuss the existing cross- national studies on employee motivation.

2.1 Motivation Theories and their Country-Compatibility

Prominent motivation theorists, such as Abraham Maslow (1968), Frederick Herzberg (1966), and David McClelland (1987) explain motivation through different models. Their theories, so called content theories, are concemed with identifying factors within the individuals, which energize, direct, and sustain behavior 15. Process theories, such as presented by Victor Vroom (1964) concentrate on how employee behavior is initi- ated, redirected and halted.

Such theories focus on certain psychological processes underlying actions, in particular how individuals make decisions that are related to their behavior. 16 Many of the motivation theories are not country-compatible which means that these theories do not necessarily work in different institutional frameworks, in other words, in different countries. Most of the theories were developed in the Anglo-Saxon coun- tries, and therefore, focused on motivating employees in the Anglo-Saxon environ- ment.

Various studies, from which some will be introduced in this chapter, have exam- ined the most prominent motiv
ation theories and their country-compatibility. Never- theless, these studies often merely conclude that the motivation theories are not appli- cable in all countries without providing any further insight on what then actually moti- vates the employees in those countries where the motivation theories do not apply. The following subsections cover the main content of some classic motivation theories and the critique that they have received with respect to their insufficient country- compatibility.

Maslows Hierarchy of Needs Maslows hierarchy of needs attempts to explain motivation in general through the assumption that each individual has five basic needs: physiological, safety, social, es- teem and self-actualization. These needs guide the behavior of indi- viduals until the respective needs have been satisfied. The various needs appear in a hierarchical fashion, meaning that the lower level needs have to be satisfied first. A higher level need is not activated before the lower level needs are satisfied. Also, the theory states that offering a higher level of satisfaction with respect to a need that has already been satisfied does not affect the behavior of individuals any more. Once a need is satisfied, it has no motivational effects anymore.


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EAN: 9783835092143
Untertitel: A Comparision of Employees' Performance Reward Preferences in Germany and the USA. 2006. Auflage. eBook. Sprache: Englisch. Dateigröße in MByte: 10.
Verlag: Deutscher Universitätsverlag
Erscheinungsdatum: Dezember 2007
Seitenanzahl: xxi189
Format: pdf eBook
Kopierschutz: Adobe DRM
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