Designing incentive pay practices to motivate not alienate: why firms adopt different payment practice configurations in different countries
Human Resource Management International Digest
ISSN: 0967-0734
Article publication date: 11 July 2016
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.
Keywords
Citation
Drury, P. (2016), "Designing incentive pay practices to motivate not alienate: why firms adopt different payment practice configurations in different countries", Human Resource Management International Digest, Vol. 24 No. 5, pp. 7-9. https://doi.org/10.1108/HRMID-04-2016-0050
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited