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Incentive Preferences of Employees in Germany and the USA: An Empirical Investigation

Author

Listed:
  • Marjaana Rehu

    (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management)

  • Edward Lusk

    (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management)

  • Birgitta Wolff

    (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management)

Abstract

This study investigates performance reward preferences of employees in Germany and the USA. The investigation uses the following three constructs: The Institutional Framework and its formal and informal implications for incentive compensation, Diminishing Marginal Utility of individuals related to performance rewards, and Incentive Schemes as motivational devices in organizations. Our empirical investigation is based upon survey data collected from employees of a MNC in Germany and the USA using an enriched form of Hofstede?s cross-cultural questionnaire. Our results show that employees from these countries have different preferences on incentives and further that incentive plans designed for one country might have non-motivating consequences in the other. We also find that the logic of diminishing marginal utility applies to certain rewards. Referencing these results, we suggest a method for organizations to develop effective and efficient incentive systems.

Suggested Citation

  • Marjaana Rehu & Edward Lusk & Birgitta Wolff, 2005. "Incentive Preferences of Employees in Germany and the USA: An Empirical Investigation," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(1), pages 81-98.
    • Handle: RePEc:nms:mamere:1861-9908_mrev_2005_01_rehu
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    File URL: https://www.nomos-elibrary.de/10.5771/0935-9915-2005-1-81
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    References listed on IDEAS

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    1. Randall S Schuler & Nikolai Rogovsky, 1998. "Understanding Compensation Practice Variations Across Firms: The Impact of National Culture," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(1), pages 159-177, March.
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    Cited by:

    1. Giapponi, Catherine C. & Scheraga, Carl A., 2007. "Industry Issue Paper: Cross-Cultural Factors and Corporate Governance Transparency in Global Airline Strategic Alliances," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 46(2).
    2. Baum, Matthias & Kabst, Rüdiger, 2013. "How to attract applicants in the Atlantic versus the Asia-Pacific region? A cross-national analysis on China, India, Germany, and Hungary," Journal of World Business, Elsevier, vol. 48(2), pages 175-185.
    3. Vladimir Davydenko & Jerzy Kaźmierczyk & Gulnara Fatykhovna Romashkina & Elżbieta Żelichowska, 2017. "Diversity of employee incentives from the perspective of banks employees in Poland - empirical approach," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(1), pages 116-126, September.
    4. Vladimir Davydenko & Jerzy Kaźmierczyk & Gulnara Fatykhovna Romashkina & Elżbieta Żelichowska, 2017. "Diversity of employee incentives from the perspective of banks employees in Poland - empirical approach," Post-Print hal-01766506, HAL.

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    More about this item

    Keywords

    Institutional Framework; Incentive Compensation; USA; Germany; Performance Rewards;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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