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Culture and compensation interaction: how do financial rewards affect public sector engagement?

Author

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  • Mdhlalose, Dickson
  • Mtshali, Thokozani

Abstract

Cultural research on the influence of individuality and collectivism on employee engagement is lacking. This study aims to analyse the impact of employee financial rewards on employee engagement, focusing on individualistic and collectivistic cultures as moderating variables in a public sector organisation. This research employed standardised face-to-face open-ended interviews. The research instrument is based on a single theme and comprises five open-ended questions to address the objectives of this study. The constant comparative data analysis approach was employed in conjunction with content analysis. The researchers categorised the data based on their disparities and similarities. This study found that the municipality offers its employees financial rewards; however, due to inequality, unfairness, favouritism, and political influence, employees are not rewarded fairly, leading to unhappiness and disengagement from their work and the organisation. The municipality does not practice either a collectivistic or an individualistic culture. A poor imbalance between individualistic and collectivistic cultures reduces the impact of financial rewards on employee engagement. This study's findings emphasise that the effectiveness of financial rewards on employee engagement depends on the organisation's practices and the equilibrium of individualistic and collectivistic cultures.

Suggested Citation

  • Mdhlalose, Dickson & Mtshali, Thokozani, 2026. "Culture and compensation interaction: how do financial rewards affect public sector engagement?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23(3), pages 1-25.
    • Handle: RePEc:zbw:espost:335677
    DOI: 10.18623/rvd.v23.n3.4523
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    References listed on IDEAS

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    1. Dr. Olivia Anku-Tsede & Ernestina Kutin, 2013. "Total Reward Concept: A Key Motivational Tool For Corporate Ghana," Business and Economic Research, Macrothink Institute, vol. 3(2), pages 173-182, December.
    2. Punam Singh & Lingam Sreehitha & Vimal Kumar & Binod Kumar Rajak & Shulagna Sarkar, 2024. "Profiling employee engagement dimensions and outcomes: a person-centered approach," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 73(10), pages 3252-3277, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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