Designing incentive pay practices to motivate not alienate: why firms adopt different payment practice configurations in different countries

Abstract

Purpose Examines the reward structures used by private-sector firms in different locations. Design/methodology/approach Analyzes the prevailing incentive pay practice configurations in 14 countries over four continents. Investigates the extent to which local factors constrain firms’ use of personal and team bonuses or profit-sharing. Findings “When in Rome, do as the Romans do” – an old saying but still relevant for the growing number of firms operating in several countries. A well-thought-out incentive scheme encourages employees to think and act in ways that support company objectives. But people in different places can have different ideas about what is fair and appropriate. Human resource professionals have to decide whether to follow the local norms or to introduce the firm’s established practices – and an informed decision can make the difference between having a motivated workforce or making an expensive mistake. Practical implications Observes that organizations in some countries show a strong preference for a particular bundle of incentive options. Warns that introducing a different approach may prove counter-productive unless combined with a careful process of change management. Social implications Highlights the importance of institutional context and social norms in determining the incentive pay configurations adopted in different countries. Originality/value Provides an international guide to prevailing patterns of incentive payment adoption. Shows that external constraints specific to individual countries can have a significant impact on the flexibility of incentive system design.

The Mediating Effects of Procedural Justice on the Relationship between Performance-based Remuneration Management and Job Satisfaction

“…These terms are used interchangeably in various kinds of organizations, but their meanings still refer to the same thing (Forth, Bryson & Stokes 2016;Newman, Gerhart & Milkovich 2017;Rozila & Scott 2015). In organizational context, it is normally interpreted as an important human resource management function where human resource managers design and administer various types of remuneration systems to reward employees based on their employment relationship 86 Jurnal Pengurusan 52 (Drury 2016;Prince et al 2016;Wickramasinghe & Wickramasinghe 2016). From the employment relationship perspective, domestic organizations will typically develop remuneration packages according to internal equity variables such as seniority, length of service and classification of work (Martocchio 2016;Newman et al 2017).…”

Los recursos humanos en las nuevas empresas internacionales. El papel del engagement

“…Si bien estas prácticas pueden ser utilizadas separadamente, mayormente se suelen implementar en combinaciones (Rynes et al, 2005;Drury, 2016), donde diversas combinaciones de prácticas incentivas pueden conllevar un mismo resultado (de Waal y Jansen, 2013).…”

“…Los incentivos no financieros pueden referirse a beneficios psicológicos o intrínsecos, tales como oportunidades de aprendizaje, reconocimiento, condiciones laborales (horario cómodo, bienestar, relaciones personales) y responsabilidad de participación en el negocio, entre otras prácticas (Elizur et al, 1991;Graham, Murray y Amuso, 2002;Simon y Kaestner, 2003;de Waal y Jansen, 2013;Van der Meer y Wielers, 2015). Los incentivos financieros y los no financieros suelen implantarse de forma combinada (Rynes et al, 2005;Drury, 2016).…”