TY - JOUR

T1 - Incentive Preferences of Employees in Germany and the United States

T2 - An Empirical Investigation

AU - Rehu, Marjaana

AU - Lusk, Edward J.

AU - Wolff, Birgitta

N1 - ISBN: 3-87988-906-8

PY - 2005

Y1 - 2005

N2 - 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 organizationsto develop effective and efficient incentive systems.

AB - 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 organizationsto develop effective and efficient incentive systems.

KW - Management studies

KW - Institutional Framework

KW - Incentive Compensation

KW - USA

KW - Germany

KW - Performance Rewards

M3 - Journal articles

VL - 16

SP - 81

EP - 98

JO - Management Revue

JF - Management Revue

SN - 0935-9915

IS - 1

ER -