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

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Authors

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.
Original languageEnglish
JournalManagement Revue
Volume16
Issue number1
Pages (from-to)81-98
Number of pages18
ISSN0935-9915
Publication statusPublished - 2005
Externally publishedYes

Bibliographical note

ISBN: 3-87988-906-8

    Research areas

  • Management studies - Institutional Framework, Incentive Compensation, USA, Germany, Performance Rewards

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