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

Author

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  • 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, Rainer Hampp Verlag, vol. 16(1), pages 81-98.
  • Handle: RePEc:rai:mamere:1861-9908_mrev_2005_01_rehu
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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. 0(Number 2), pages 1-23.
    2. Baum, Matthias & Kabst, RĂ¼diger, 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.

    More about this item

    Keywords

    Institutional Framework; Incentive Compensation; USA; Germany; Performance Rewards;

    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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