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National culture and incentives: Are incentive practices always good?

Nicholas R. Prince, J. Bruce Prince and Rüediger Kabst

Journal of World Business, 2020, vol. 55, issue 3

Abstract: This study evaluates national culture’s influence on the incentive practice-firm performance relationship. Hofstede’s work (1993) and institutional theory (North, 1990) suggest national culture will moderate incentive effectiveness, while others suggest it has minimal impact (Gerhart & Fang, 2005). We find performance orientation (PO), in-group collectivism (I-GC) and uncertainty avoidance (UA) dimensions explain strength and direction of incentive-performance relationships. Profit-sharing―performance relationships are favorably supported by cultures with high PO, high I-GC, and low UA; however, the individual-bonus―performance relationship is enhanced by the near-opposite culture profile. There was no evidence that the team-bonus―outcome relationship is influenced by national culture.

Keywords: Comparative HRM; National culture; Incentives; Profit sharing; Team bonus; Individual bonus (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.jwb.2020.101075

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