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National culture and incentives: Are incentive practices always good?

Author

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

Suggested Citation

  • Prince, Nicholas R. & Bruce Prince, J. & Kabst, Rüediger, 2020. "National culture and incentives: Are incentive practices always good?," Journal of World Business, Elsevier, vol. 55(3).
    • Handle: RePEc:eee:worbus:v:55:y:2020:i:3:s1090951620300031
    DOI: 10.1016/j.jwb.2020.101075
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    3. Prince, Nicholas R. & Krebs, Benjamin & Prince, J. Bruce & Kabst, Rüediger, 2022. "Revisiting Gooderham et al. (1999) “Institutional and Rational Determinants of Organizational Practices: Human Resource Management in European Firms”," Journal of World Business, Elsevier, vol. 57(6).
    4. Tekic, Anja & Tekic, Zeljko, 2021. "Culture as antecedent of national innovation performance: Evidence from neo-configurational perspective," Journal of Business Research, Elsevier, vol. 125(C), pages 385-396.
    5. Geert Braam & Erik Poutsma & Roel Schouteten & Beatrice van der Heijden, 2024. "Employee financial participation and corporate social and environmental performance: Evidence from European panel data," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 381-409, June.
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    7. Baidyanath Biswas & Pooja Sengupta & Boudhayan Ganguly, 2022. "Your reviews or mine? Exploring the determinants of “perceived helpfulness” of online reviews: a cross-cultural study," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1083-1102, September.
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