A study on compensation strategies and their effects on corporations in a global context

Open Access
Kim, Wonseok
Graduate Program:
Human Resources and Employment Relations
Master of Science
Document Type:
Master Thesis
Date of Defense:
April 04, 2012
Committee Members:
  • Elaine Farndale, Thesis Advisor
  • Xiangmin Liu, Thesis Advisor
  • Leonard Pollack, Thesis Advisor
  • compensation
  • reward
  • global
  • IHRM
  • SHRM
  • national culture
  • organizational performance
  • employee motivation
  • human resources management
  • context
These days, as corporations are seeking global opportunities in this global society, how to motivate employees from different cultures, who have different values, needs, and norms, is becoming increasingly important. This study first dealt with the relationship between national culture and the prevalence of three kinds of reward practices—individual-based bonuses, group-based bonuses, and workplace childcare schemes. In addition, this study also examined the link between reward practices and organizational performance in different national cultures. In analyzing, this study picked up seven countries, the Netherlands, UK, US, Philippines, Germany, Taiwan, and Japan, and, using Hofstede’s four cultural dimension scores, compared the mean scores of use of each compensation practices in different cultures. In other words, this study divided the national culture dimension scores into three groups (high, medium, low) and examined the mean scores to see the connection between reward practices and national culture. Also, to examine the moderating effects of national culture on the link between the three reward practices and organizational performance, multiple regression analysis was conducted. This study’s results showed that significant relationships between national culture and the prevalence of the three kinds of reward practices as well as the moderating effects of national culture on the relationship between reward practices and organizational performance were not supported or had a mixed result. The findings of this study suggest that although national culture can play an important role in some reward practices, it is not the only factor to be considered in establishing compensation strategies abroad. That is, not only national culture but also other contextual factors, such as institutional factors, should also be considered as moderating variables when HRM managers in corporations doing business abroad build compensation strategies.