Incentive Pay Systems:
Does Societal Cultural Influence Global Adoption?
J. Bruce Prince
Kansas State University
Manhattan, KS USA
Nicholas R. Prince
University of Illinois
Urbana-Champaign, IL USA
Bradley R. Skousen
University of Illinois
Urbana-Champaign, IL USA
Rüediger Kabst
Justus-Liebig-Universität
Gießen, Germany
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Incentive Pay Systems:
Does Societal Cultural Influence Global Adoption?
Abstract
The use of incentive pay systems are widely seen as an appropriate and effective HRM practice.
While strategic HRM research has emphasized the importance of industry and other
contingencies in making the case for when different incentive pay systems will be most effective,
there has been inadequate appreciation for the influence of culture on HRM practices. The
societal culture of a firm’s country presents an institutional context which may discourage or
encourage the use of particular incentive pay practices. Ignoring the influence of culture is at
odds with the growing emphasis on viewing HRM from a global or cross-national (versus UScentric) perspective. In this research, we address this research gap by evaluating the relationship
between societal culture dimensions and the use of five different incentive pay practices in
private sector firms from 14 different countries from several world regions using the GLOBE
culture framework and the CRANET survey of HRM practices. Our results find a substantial
relationship between culture and the use of profit sharing, share scheme, performance pay, and
individual bonus incentive systems. Only the use of a team bonus incentive system was unrelated
to culture. The culture dimensions that had the strongest explanatory power varied across
different incentive systems, but both the performance orientation and future orientation culture
dimensions had consistent positive relationships while in-group collectivism tended to have a
weaker relationship with incentive pay systems. Uncertainty avoidance, power distance, and
institutional collectivism also had significant relationships to different incentive pay systems.
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Incentive Pay Systems:
Does Societal Cultural Influence Global Adoption?
Human resource management (HRM) practices vary across different contextual factors
such as industry, firm size, occupational groups within a firm (Jackson, Schuler, & Rivero,
1989), international strategy (i.e., domestic, international, multi-domestic, global, transnational)
(Schuler, Dowling, and DeCieri, 1993), and firm operational strategy (Macduffie, 1995; Youndt,
Snell, Dean, & Lepak, 1996). While such factors are either endogenous or exogenous to the firm,
the external environment has long been seen as a powerful contingency factor in understanding
the varying use of HRM and managerial practices. For example, complex legal and regulatory
environments shape the firm employee relationship (Florkowski & Schuler, 1994). Over the last
several years there has been substantial and sustained interest in the extent that national culture is
an important source of variance in HRM practices across the globe (Luthans, Welsh, &
Rosenkrantz, 1993; Hofstede, 1991, 1990; Trompenaars, 1993; Laurent, 1983, 1986; Newman &
Nollen, 1996; Schuler & Rogocsky, 1998).
Institutional theory is a useful optic for understanding the variance in HRM practices in
different countries and cultures (Gooderham, Nordhaug, & Ringdal, 1999, 2006; Prince, Katz, &
Kabst, 2011). From this perspective, organizations are constrained by their environments. The
HRM practices that firms choose to implement are constrained choices. Institutional theory
maintains that organizations reside as members in an organizational field, often called
stakeholders, that constrains the actions that each organization can take (Meyer & Rowan, 1977).
Organizations embedded in an organizational field are constrained because they must comply
with the institutional practices of the field in order to gain legitimacy (Meyer & Rowan, 1977).
Overtime, the collection of members develops and conveys a set of acceptable organizational
practices for members of the field. For an organization to be successful, it must implement the
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institutional practices that meet the institutional field members’ expectations (DiMaggio &
Powell, 1983). As expectations are met, other members of the field view the organization as
legitimate and the organization is able to garner the support necessary to be successful (North,
1990).
A reality that is too often left unaddressed is that organizational fields themselves are
embedded in national cultures and constrained by institutional demands of the country wherein
they reside. These institutional pressures stem from regulatory, normative and cognitive
influences that evolve in a national context over time (Scott, 1995). Regulatory influences
consist of the formal rules and regulations derived from the country’s legal system while the
cognitive influences are the cognitive constructs and decision processes that are acceptable or
taken-for-granted in a given institutional environment such as a country (Ang & Michailova,
2008; Jepperson, 1991). Normative influences reside in the assumptions, value systems, and
norms that are part of the larger national culture of a country. HRM practices that are acceptable
or “fit” a given culture may be seen as illegitimate and infrequently used in another. As
recognized in the agency perspective (DiMaggio, 1988; Hoffman, 1999; Hoffman & Ocasio,
2001) of institutional theory, organizational decision makers have some latitude in responding to
institutional mandates. A given practice may be outside the usual range of acceptable practices
and at odds with some aspect of societal culture or other institutional mandates, but organizations
may be able to craft an acceptable alternative that is less at odds with institutional pressures. That
said, there are constraints on the degree of agency that can be initiated before losing legitimacy.
As Hollingsworth (1997:265-266) pointed out, “there are serious limitations in the extent to
which a society may mimic the forms of economic governance and the performance of other
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societies.” As such culture constrains or influences organizational practices within a given
societal context.
There is ample evidence that national cultures vary across the globe. According to
Schuler & Rogocsky (1998), national culture is particularly good at explaining differences in
HRM practices between countries. The evidence that indicates that HR practices vary depending
on national culture has been growing (Newman & Nollen, 1996; Hofstede, 1993; Denison &
Mishra, 1995; Schuler et al., 1993). While in past decades most research was done within one
cultural context (Aycan et al., 2000), scholars have now dimensionalized the concept of national
culture into various measures. This has allowed us to move beyond general country-to-country
comparisons and adds depth to the narrative underlying normative institutional forces that have
been used to support the argument that HRM practices converge to country-based normative
pressures, which leads to divergent practices around the globe. Seminal work in this area was
done by Hofstede (1980, 1993). Recently, a large group of researchers from around the world in
the Global Leadership and Organizational Effectiveness Research Program (GLOBE) project
have elaborated on and extended Hofestede’s work (House, Hanges, Javidan, Dorfman, &
Gupta,2004). This consortium of members has studied 62 countries in developing their approach
to culture. This new approach has the potential of addressing criticisms of Hofestede’s approach
to culture. Within the HR area, Gerhart and Fang (2005) noted the minimal explained variance
that Hofestede’s culture metrics have provided. To be useful, in both a practical and theoretical
sense, culture dimension metrics need to explain differences in organizational practices.
There is a lengthy history of research on patterns of divergence and convergence in HRM
practices across national borders and cultures. Past research has generally focused on European
countries and has often used the USA as a point of contrast. Research by Brewster (1995, 1999)
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and others (Apospori, Nikandrou, Brewster, & Papalexandris, 2008; Brewster, Tregaskis,
Hegewisch, & Mayne 1996; Farndale, Brewster, & Poutsma, 2008; Prince et al., 2011; Stavrou,
Brewster, & Charalambous, 2010) are notable in this so called divergence/convergence debate in
the HRM literature. They have found good support for institutional theory based logic in
understanding the divergence of practices across different countries. A major contribution of this
study is to include other world regions and test the explanatory power of these underlying culture
dimensions.
A competing perspective to the emphasis on divergence of HRM practices across cultures
is the viewpoint that firms will increasingly converge on managerial practices irrespective of
culture and regulatory regimes. This argument focuses on our increasingly integrated global
economy where there are cross-national institutional pressures to converge towards global “best”
HRM practices. Typically, convergence is seen as a reflection of the influence of dominant
economic powers and competitive pressures. From this perspective, economically efficient
methods will win out over other methods that have been historically less-contested in a lessintegrated global marketplace. HRM practices in U.S. firms have often been seen as an
influential benchmark or global standard of practice. If there is global convergence to a common
set of “best” HR practices, then differences in culture will become increasingly unrelated to
different practices.
GLOBE Approach to Societal Culture
The GLOBE approach to culture (House, Javidan, Hanges, & Dorfman,2002; House et
al., 2004) has been gaining increased research attention. For example, a 2010 issue of the
Journal of International Business focused exclusively on culture (Tung & Verbeke, 2010) and
frequently contrasts the newer GLOBE approach to previous theories of culture. The GLOBE
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model presents nine dimensions of culture. In reviewing past research and developing our
hypotheses we identified six of these culture dimensions as most relevant to this research. These
are: (1) Performance Orientation, (2) Future Orientation, (3) Power Distance, (4) Institutional
Collectivism, (5) Uncertainty Avoidance, and (6) In-Group Collectivism as predictors of HRM
practices.
Performance Orientation is the degree to which performance improvement, innovation
and striving for performance excellence are encouraged and rewarded. There is high variance on
this culture dimension around the world. In the GLOBE findings, countries are scored and
subsequently sorted into similarly scored societal clusters. Countries scoring high on the
performance orientation dimension include countries in the Confucian Asia, Germanic Europe,
and Anglo clusters with low-scoring clusters that include Eastern Europe and Latin America. Of
the countries included in our sample we also see high variance on the performance orientation
dimension, the U.S. (4.49 on a 7-point scale) is the 11th highest rated and Austria (4.36/7) is the
14th highest rated country. Greece (3.20/7) is the lowest rated and Hungary (3.43/7) is fourth
from the lowest of the 62 societies included in the GLOBE study (House et al. 2004).
Future Orientation is the degree to which individuals in a country are focused on
delaying immediate gratification and engaging in future-oriented behaviors such as investing in
the future, and advanced planning and preparation. High scoring country clusters include
Germanic and Nordic Europe and low scoring societal clusters include the Middle East, Latin
America, and Eastern Europe. Of the countries included in our analyses, Austria (4.46/7) and
Denmark (4.44/7) are the sixth and seventh highest rated future oriented countries and Greece
(3.40/7) and Hungary (3.21/7) are near the bottom of all countries measured on this dimension.
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Power Distance is the extent to which organizational members agree that power should
be stratified and concentrated at upper hierarchical echelons. In the GLOBE study, no cluster
was classified as high scoring and Nordic Europe is the only cluster in the low-scoring group. Of
the countries represented in our sample, Hungary (5.56/7) is the 12th highest scoring country and
Greece (5.40/7) and Slovenia (5.33) are also ranked in the highest scoring band of countries.
Denmark (3.89/7) is the lowest country on this dimension of all 62 GLOBE societies.
Institutional Collectivism is the degree to which organizations reward or encourage the
distribution of resources to collectivities and focus on collective action. The focus on the
distribution of individual rewards and actions is the polar opposite of this culture dimension.
Nordic Europe and Confucian Asia are high scoring country clusters and Germanic and Latin
Europe and Latin America are rated as low-scoring clusters on this dimension. Of countries
included in our analyses, Sweden (5.22/7) is the highest scoring country and Japan (5.19/7) is the
third highest rated country. Greece (3.25/7) and Hungary (3.53/7) are the two lowest scoring
countries on institutional collectivism included in the GLOBE sample.
Uncertainty Avoidance is the degree to which organizational members strive to avoid
uncertainty through reliance on established social norms, rituals or bureaucratic practices. Nordic
and Germanic European countries are in the two highest scoring country clusters. The Middle
East, Latin America and Eastern Europe are in low-scoring country clusters on this dimension.
Sweden (5.32/7) and Denmark (5.22/7) are the second and fourth highest scoring countries on
this dimension, while Hungary (3.12.7) is the second to the lowest and Greece (3.30/7) is also in
the lowest scoring band of countries.
In-Group Collectivism is the degree to which organizational members express loyalty,
cohesiveness and pride in their organizations and families. In-Group collectivism suggests that
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individuals are primarily concerned with those with whom they associate versus their own
individual needs and benefits. The highest scoring country clusters are Southern Asia, Middle
East, Eastern Europe, Latin America and Confucian Asia. The low-scoring clusters are Germanic
and Nordic Europe and Anglo countries. Of the countries included in our sample, Taiwan
(5.59/7) is the 20th highest rated country and Slovenia (5.43/7) is also in the top-scoring band of
countries. Sweden (3.66/7) and Denmark (3.53/7) are the lowest two countries on this dimension
in the GLOBE set of countries.
Incentive Pay Structures
How firms choose to pay employees is a basic necessity of HRM system design.
Compensation choices are many and varied. Base salary, benefits and incentives are the main
categories of choices. In this research we focus on incentives, which we expect to be very
sensitive to societal culture. There is a long history of research on performance-based incentive
pay. This research presents a general conclusion that incentive systems have a positive effect on
organizational effectiveness (Gerhart & Milkovich, 1990; Lawler, 2000). This conclusion is
based on research generally done on US firms and is emphasized in US HRM textbooks.
Research on high performance work systems is an additional research stream that provides
support for the use of incentive pay systems (Huselid, 1995). This research was initially
conducted in a US context, but recent research has been done in more multinational contexts
(Guthrie, 2001). This research has often used a composite measure high performance work
systems that included multiple factors, in addition to an emphasis on incentive pay, and this
makes it difficult to pull out the unique effects of incentive pay systems where cross-national
samples are employed.
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There are many ways to structure pay incentives. The performance trigger for distributing
rewards can range from individual to team-based performance up to organizational or enterprise
performance based incentive practices, such as seen in profit sharing and ownership share-based
schemes. Incentives are often associated with the U.S.-oriented approach to compensation.
Incentives are central to what has been described as calculative HRM. Previous research by
Gooderham, Nordhaug, & Ringdal (1999) has found that the use of calculative HRM practices is
quite varied and sensitive to country-level institutional pressures. Calculative HRM practices are
the specialized task structure, training, and incentives provided to each employee. These
practices are designed to ensure that “production activities are at all times efficiently supplied
with the necessary input of human resources” (Gooderham et al., 1999: 510). Historically, these
practices have focused on the individual as opposed to the collective work group or organization.
It is through training and incentives that the calculative HRM system is reinforced (Gooderham,
Parry, & Ringdal, 2008). Gooderham’s research has found strong variance in calculative HRM
use across countries.
There is a strong logic going back to Hofestede’s work that argues that individual
performance based incentives will be more prevalent in individualistic verses collectivist
cultures. This logic becomes less clear and its power to predict outcomes lessens as one moves to
incentives based on enterprise or organizational level performance. Schuler and Rogovsky
(1998) used Hofestede’s cultural metrics and found a relationship between individualism and
increased use of individual based incentive systems. They also found support for increased use of
ownership plans (i.e., stock and stock option plans). Their analysis also found that increases in
the uncertainty avoidance societal cultural dimension is associated with decreased use of
individual performance based plans, but was also associated with increased use of ownership
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(stock) plans. Increases in the power distance culture dimension was not related to the use of
individual-based incentives, but was associated with decreased use of ownership plans. From this
we should conclude that culture dimensions may have different relationships to different types of
incentive plans and it is important to evaluate different types of incentive plans separately. At a
minimum, it is important to evaluate both individual focused plans and enterprise performance
plans when analyzing incentive-based pay systems and culture. We must also keep in mind two
potential criticisms of Schuler and Rogovsky’s (1998) often-referenced research. First, they base
their conclusions on statistically significant correlations and do not address effect size. The lack
of explained variance has been a major criticism of Hofestede’s research (Gerhart & Fang,
2005). Second, these results are now dated and there is the counter-argument that with increasing
globalization of business, the culture and incentive pay practice relationships apparent in the
early 1990s may no longer exist.
Hypotheses
The preceding discussion provides the bases for the following hypotheses:
Hypothesis 1: The six societal culture dimensions of (1) Performance Orientation, (2)
Future Orientation, (3) Power Distance, (4) Institutional Collectivism, (5) Uncertainty
Avoidance, and (6) In-Group Collectivism will explain significant explained variance in
the following five incentive pay systems: (1)individual bonus systems, (2) team bonus
systems, (3) performance pay systems, (4) profit sharing, and (5) share scheme systems.
There is an absence of current research that uses a wide range of incentive pay practices
to evaluate the unique contribution of the House et al. (2004) GLOBE societal culture
dimensions in understanding variations in the adoption of incentive pay practices in firms from
several countries and world regions. Yet, throughout the societal culture literature there is a
continuing belief that culture makes a difference in managerial practice. In this first general
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hypothesis, we argue that culture dimensions will explain unique variance in incentive practices.
This hypothesis sets the stage for more focused hypotheses that follow. The counter to this
hypothesis is that, due to the process of globalization or weaknesses in Hofestede-inspired
theories and measures of societal cultural, there will not be strong relationships between
incentives and culture. This hypothesis also directly addresses Gerhard and Fang’s (2005)
criticism that culture research has simply focused on statistical significance and has not
explained variance in practices.
The remaining hypotheses provide directional predictions for how each culture dimension
is related to different incentive systems:
Hypothesis 2a: Firms from countries with a higher performance orientation culture will
have an increased use of individual performance based, team-based and pay for
performance incentive based pay systems.
Hypothesis 2b: Firms from countries with a higher performance orientation culture will
have an increased use of enterprise-based performance incentive systems (i.e., profit
sharing and share scheme systems).
Hypothesis 3a: Firms from countries with a higher future oriented culture will have an
increased use of individual performance based, team-based and pay for performance
incentive based pay systems.
Hypothesis 3b: Firms from countries with a higher future oriented culture will have an
increased use of enterprise-based performance incentives systems (i.e., profit sharing and
share scheme systems).
Hypothesis 4a: Firms from countries with a higher power distance culture will have a
increased use of individual performance based, team-based and pay for performance
incentive based pay systems.
Hypothesis 4b: Firms from countries with a higher power distance culture will have an
increased use of enterprise-based performance incentives systems (i.e., profit sharing and
share scheme systems).
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Hypothesis 5a: Firms from countries with a higher institutional collectivism culture will
have a decreased use of individual performance based, team-based and pay for
performance incentive based pay systems.
Hypothesis 5b: Firms from countries with a higher institutional collectivism culture will
have an increased use of enterprise-based performance incentives systems (i.e., profit
sharing and share scheme systems).
Hypothesis 6a: Firms from countries with a higher uncertainty avoidance culture will
have a decreased use of individual performance based, team-based and pay for
performance incentive based pay systems.
Hypothesis 6b: Firms from countries with a higher uncertainty avoidance culture will
have a decreased use of enterprise-based performance incentives systems (i.e., profit
sharing and share scheme systems).
Hypothesis 7a: Firms from countries with a higher in-group collectivism culture will
have a decreased use of individual performance based, team-based and pay for
performance incentive based pay systems.
Hypothesis 7b: Firms from countries with a higher in-group collectivism culture will
have an increased use of enterprise-based performance incentive systems (i.e., profit
sharing and share scheme systems).
Methods
Our analysis focuses on the relationship between six GLOBE culture dimensions and five
incentive pay practices from private sector organizations in 14 countries from a wide-range of
world geographical regions including five societal clusters as defined by the GLOBE studies:
Anglo, Nordic, Germanic and Eastern Europe, and Confucian Asia. The data analyzed are from
the 2009 CRANET database (Parry, Stravrou-Costea, & Morley, 2011). This panel survey
gathers information on a wide variety of organization-level HRM policies and practices and has
been repeated every four or so years since 1989. Initially, the survey focused on European
countries, but now includes organizations from 32 different countries. In 2009 two Asian
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countries (Japan and Taiwan) and several Eastern European countries were added. Data is
collected from organizations that are generally representative of each national economy, except
that it over-samples large organizations (those with over 100 employees). The overall response
rate for the 2004 survey round was 17%, the exact response rates for the 2009 round are still
being determined for all countries. Each country has a country manager who oversees the
collection of data. See Beck, Kabst and Walgenback (2009) for a summary of the 2004 survey
process. The 2009 survey process is very similar, but we currently lack exact information on
response rates from all countries. In this survey a single respondent, generally a senior HR
administrator, provides responses describing each organization. Many items are yes/no factbased questions, which lessens the potential problems associated with using a single respondent.
Sample
Our sample is composed private sector firms from the following 14 countries (country
sample sizes are in parentheses): Austria (n=117), Australia (n=61), Denmark (n = 251), Finland
(n=46), France (n=153), Germany (n= 343), Greece (n=184), Hungary (n=95), Japan (n = 369),
Slovenia (n=159), Sweden (n = 159), Taiwan (n = 225), United Kingdom (n = 93), and USA (n=
163). The total sample size from these countries is 2396.
Measures
GLOBE societal culture practices dimensions. We use six of the GLOBE culture
dimensions to evaluate the relationship between the country-level culture and level of incentive
pay practices. These country-level scores for each culture dimension (from House et al., 2004)
were assigned to all firms based upon the country in which they reside. The country’s societal
culture practices (referred to “as is” scores in GLOBE framework) scores are based on
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managerial reports of actual practices in their organizations. The country average is the
aggregation of these observations within a given country. The following GLOBE culture
practices dimensions used are: Performance Orientation, Future Orientation, Power Distance,
Institutional Collectivism, Uncertainty Avoidance, and In-Group Collectivism.
Incentive pay HRM practices. The incentive pay HRM practices addressed in this
research range from individual performance bonus systems to organizational performance based
systems. The survey questions related to these practices were evaluated with both exploratory
factor analyses (EFA) and confirmatory factory analysis (CFA). The following five practices
were considered: individual bonus incentive system, team bonus incentive system, performance
pay, profit sharing, and employee share schemes. For each of these incentive practices, the
respondent was asked for each practice to indicate whether a given formal incentive system
exists for each of the four following employee groups: managers, professional/technical, clerical,
and manual employees. For each practice, the survey items on the employee groups are used as
indicators of the extent that the practice is formally used. For example, extensive use of profit
sharing would be indicated by all four employee groups using this incentive system, while a firm
with limited profit sharing usage may only use it for managers and not the other three employee
groups. In the initial EFA, we conducted a principal component analysis (with varimax rotation)
of each set of the four related items (e.g., use of profit sharing in four employee groups) was
conducted. The unidimensionality of each of the five incentive scales was supported. The results
ranged from an Eigenvalue of 1.96 (with component loadings that exceeded .61) for the four
team bonus incentive items up to an Eigenvalue of 3.38 (with component loadings that exceeded
.87) for the four employee share scheme items.
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The CFA was then used to provide a more rigorous evaluation of theses scales. AMOS
was used to determine the adequacy of the five incentive system scale solutions. In the initial
pass, the model fit indices proved unacceptable and, in the follow-up analysis, the indicator
associated with having a formal system for manual employees was removed from each of the
three latent variables: individual bonus system, team bonus system, and performance pay. The
formal system for manual employees indicator variable was retained for the employee share
scheme and profit sharing latent variables. The resulting CFA provided acceptable model fit
indices (GFI=.94, AGFI=.91, NFI=.95, CFI=.96, and RMSEA=.068) and statistically significant
standardized regression weights (ranging from .64 to .96) for each indicator on their
corresponding latent variable. All additional analyses used these refined scales. Follow-on
reliability analysis provided additional support. The standardized alpha reliability coefficients
ranged from .80 for the individual performance scale to .94 for the employee share scheme scale.
In summary, the five incentive pay system scales are: (1) use of individual performance
bonus systems, (2) use of team performance bonus systems, (3) use of performance-based pay
systems, (4) use of profit sharing systems, and (5) use of employee share schemes. The first three
scales use three items based on yes-no replies indicating whether there is a formal incentive
system for each of the following three employee groups: management, professional/technical,
and clerical/administrative. The scales for profit sharing system and employee share scheme
system scales are similar, except that they are based on four items, which also include a yes-no
reply indicating that manual employees have each of these organizational-level formal incentive
systems. These scales range from 0 (indicating that no formal system exists for any employee
groups) to 1.0 indicating all three groups (in the case of the first three scales) or all four
employee groups for the last two scales have formal incentive systems.
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Control variables. To control for alternative explanations of our results, we include
several organizational-level control variables. These variables are likely to be related to the
dependent or independent variables. It is plausible that they could be the main explanatory
factors seen in any observed relationship between societal culture and an incentive system
variable of interest. The control variables included in our analysis are:

Organizational size. Measured as the log of the total number of employees in each
organization. A log transformation was used to make the scale closer to a normal curve
distribution.

Union intensity. The percentage of the workforce that is unionized. The single-item scale
ranged from 1 (0% union members) to 6 (76-100% union members).

International product market focus. A single-item measure indicating whether the main
market for the firm’s goods and services was within the nation’s boarders (coded 0) or a
cross national market (coded 1).

Service versus Manufacturing. Indicates the main sector of the industry or services in
which the firm operates. Service oriented firms are coded 0 and manufacturing firms are
coded 1.
Table 1 presents descriptive information for all scales. Standardized alpha reliability
coefficients for the incentive pay scales are noted down the diagonal. The control variables are
single-item indices and the GLOBE culture dimension values assigned to each firm are based on
the country in which they reside. These values were obtained from the GLOBE website.
Insert Table 1 About Here
Analysis
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The relationships between the GLOBE culture dimensions and use of incentive pay
systems were analyzed using regression analyses. This includes separate analyses in which the
six GLOBE culture scales are regressed on each of the incentive pay dependent variables. In
follow-up analyses a two-step hierarchical regression process is used. In the first step, the four
control variables are entered into the model followed by the six culture measures on the second
step. Problems of multicolliniarity are frequently seen in analyses with the GLOBE measurers
due to their high intercorrelations. This problem causes the regression weights to become
unreliable and difficult to interpret while not affecting the total explained variance (Cohen,
Cohen, West, & Aiken, 1988). While the indices of mulitcollinearity provided by SPSS did not
achieve levels indicating high multicollinearity (tolerance < .10 and VIF > 10.0), those statistics
for the GLOBE future orientation scale were high enough to merit further analysis. The
multicollinearity statistics for future orientation varied only slightly from regression to regression
and tolerance was approximately.17 and VIF was 5.63. The multicollinearity statistics for the
performance orientation culture dimension are slightly worse in the full regression with the
controls (tolerance = .16, and VIF = 6.2). To evaluate the stability of the regression weights
across the other five culture predictors, these regressions were re-run with the future orientation
scale removed. In these supplemental analyses, the multicollinearity statistics for each of the
other variables improved substantially and further supplemental analysis was not merited.
Results
The regression analyses for the first three incentive pay systems are reported in Table 2.
The first column under each dependent variable presents the initial analysis of the six GLOBE
culture measures. The second column presents the results with the future orientation predictor
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removed to evaluate problems associated with multicollinearity. In column three and four, these
same culture scale sets are analyzed using two-step hierarchical analyses where the control
variables are added in the first step.
For the individual bonus incentive system, the six culture measures explain a significant
variance with an adjusted R2 of .08. All regression weights are significant except for institutional
collectivism. In the second regression (which excludes future orientation), the R2 remains highly
significant but decreases by a statistically significantly margin to .06. When controls are added to
the regression equation, presented in the third column, there is a significant overall R2 of .09. In
the regression equation with the control variables and the GLOBE future orientation variable
removed, we see a statistically significant drop in R2 to .08. There is a consistent pattern across
these four regressions. Increases in uncertainty avoidance are associated with decreases in the
formal use of individual bonus incentive systems for more employee groups. Conversely, higher
levels of performance orientation and in-group collectivism are consistently associated with the
increased use of individual bonus incentive systems for more types of employee groups.
Similarly, when future orientation is included it has a significant positive regression weight and
significantly adds explained variance beyond that achieved with the other five culture
dimensions. The impact of power distance is not significant once the relationships with the
control variables (notably firm size) are accounted for. It appears that the negative relationship
between institutional collectivism and the use of individual bonus systems is probably not that
strong in spite of the significant regression weights in the first and third columns. The removal of
the performance orientation dimension should increase the likelihood of other correlated
variables to become significant. Instead we see a drop to non-significance when future
orientation is removed. Multicollinearity seems to be associated with this culture dimension
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obtaining statistical significance. The near-zero correlation of .01 further leads us to conclude
that institutional collectivism is not negatively associated with the introduction of this type of
incentive system.
Insert Table 2 about here
The analysis of team bonus incentive systems and culture leads to the conclusion that
none of the six culture dimensions are substantially related to the use of this type of incentive
system. Almost no overall explained variance is seen and increases in firm size and lower levels
of unionization provide a more parsimonious explanation of this minor amount of explained
variance. In the initial regression analysis presented in the first column in Table 2, three of the
regression weights are significant. However, none of the five regression weights are significant
when the future orientation variable is removed. Similarly, in the regressions with the control
variables in the first step, none of the six culture variables reached statistical significance.
The use of performance pay is a more general measure of formal incentive practices in an
organization. It is most strongly correlated to the use of individual (r=.31) and least correlated
with share scheme usage (r=.06). The use of other incentive approaches not included in the
survey, such as the use of formal merit pay systems, would logically be related to the general
perception that formal pay-for-performance management approaches are employed. Culture has
a fairly strong connection to this dependent variable with a significant adjusted R2 of .14 being
reached in the regression equation with all six culture variables reported in the first column. All
culture dimensions are significant with uncertainty avoidance and institutional collectivism being
negatively related. Increases in these two culture dimensions are associated with the decreased
use of general performance pay practices, while increases in the other four dimensions (future
20
orientation, power distance orientation, performance orientation, and in-group collectivism) are
associated with increases in performance pay.
In the regression equation reported in the second column with the performance pay
dependent variable the future orientation dimension (which had higher multicollinearity indices)
is dropped and we see different results. There is a significant drop in R2 from .14 to .11. This
indicates that the positive relationship between future orientation and performance pay is
substantial and not an artifact of multicollinearity. We do see the influence of multicollinearity in
the drop in significance of the regression weights for uncertainty avoidance and in-group
collectivism culture dimensions. These changes make those relationships, which were highly
significant in the first-column regression, more suspect. The continued positive relationship
between power distance and performance orientation and negative relationship with institutional
collectivism with the use of performance pay systems when future orientation removed provides
additional confidence in those associations.
The final two columns with the performance pay system dependent variable presents the
two-step regressions where the controls are added on the initial regression analysis. In these two
regression equations we see results that are consistent with culture-only regressions. As was the
case with both individual and team bonus incentive systems, we see that increases in firm size
have a consistent positive influence on the use of pay-for-performance (β=.08**/.10***). In the
regression equation without future orientation, we see a modest relationship indicating that
service industry (versus manufacturing industry) firms tend to use more performance pay
systems (β= -.05*). The regression weights with the culture dimensions in these regressions
follow the same pattern seen in the first two columns. Future orientation, power distance,
21
performance orientation, and institutional collectivism are the consistent predictors of this
dependent measure.
The use of profit sharing systems emphasizes the provision of an incentive based on the
overall organizational financial performance and we see that culture is strongly related to the use
of this practice. These results are presented in Table 3. The pattern of relationships for this
practice differs from those seen with the other incentive system practices. The six culture
dimensions explain more variance in this incentive system than any other dependent measure (R2
= .22). The significant drop in explained variance to R2 = .18 when the future orientation
dimension is dropped in the second column indicates that this culture dimension is a strong
predictor of the use of profit sharing systems. However, given the negative regression weight (β=
-.52***), increases in future orientation are associated with the decreased use of this
organizational performance based incentive approach. With the other incentive based systems
(except team bonus systems) there was a positive relationship. There is no evidence of
multicollinearity in the results of the second column regression. For those results, it appears that
in-group collectivism and institutional collectivism tend to explain the same variance in the use
of profit sharing as is explained by the future orientation dimension. The regression weights for
those culture dimensions become significant or more significant when the future orientation
variable is dropped from the analysis. The other culture dimensions produced consistently
significant results. While increases in uncertainty avoidance have been negatively related to the
use of other incentive approaches (except team bonus system), it is associated with the increased
use of profit sharing (β= .52***/.31***). As seen with the other incentive approaches (except
team bonus systems), increases in power distance orientation and performance orientation are
associated with increases in profit sharing use.
22
Insert Table 3 about here
This same pattern of results is also evident in the two-step hierarchical regressions with
the four control variables. These are presented in the third and fourth columns in Table 3. Use of
profit sharing is not associated with size. The significant regression weight (β= .12***/.12***)
on the service versus manufacturing dichotomous variable indicates that manufacturing firms are
more inclined to use profit sharing than service firms. With the entry of the culture dimension
predictors on the second step, the same pattern of relationships noted in the first two regression
equations (in columns one and two) become readily apparent.
The right side of Table 3 provides the results for the regression equations predicting the
use of share scheme incentive systems. Like profit sharing, this is an organizational level
performance based incentive system. However, it is more complicated in the sense that a number
of factors beyond past financial performance drive increases in share values. The exact design of
firm share schemes is likely to be quite varied across the firms in our multinational sample. Our
results find that culture has a strong relationship to the use of these incentive systems. The first
column regression equation produced a significant R2 of .16. Unlike the results with other
dependent variables (except team bonus systems), the use of share schemes has, at best, a
marginal positive relationship with the future orientation culture dimension. Evidence of
multicollinearity problems associated with future orientation did not appear to have much of an
impact on these regressions. The drop to non-significance for the in-group collectivism variable
when future orientation is dropped suggests there is not a substantial relationship between this
culture dimension and the use of share scheme systems. Uncertainty avoidance is consistently
negative in both of the first two regressions (with and without future orientation). Increases in
institutional collectivism, performance orientation and power distance orientation are each
23
associated with increased use of share scheme incentive systems. The addition of the control
variables makes a significant increase in the R2 value (from .16 to .19). This is a function of the
strong positive relationship between increases in firm size and use of share-based incentive
systems. In spite of this strong relationship, the pattern of results with the culture dimension
predictors did not change appreciably. Uncertainty avoidance, performance orientation, and
institutional collectivism continued to be strong predictors of this incentive system. The main
change is that it became clear that the modest positive relationship between the dimension of
power distance and share system usage is a function of its relationship with firm size. Once this
is accounted for, there is no relationship.
The general lack of significant relationships between unionization levels and international
market focus is noteworthy. The zero-order correlation between unionization and these five
incentive practices is always negative, particularly in the case of performance pay (r=-.17) and
profit sharing (r=-.14). What we see from the regression analyses, is that this variance is
accounted for in the intercorrelation of unionization with size (r=.22) and the service versus
manufacturing variable (r=.17). These two variables have the stronger relationship with the
incentive system variable and accounted for the same variance. International product market
focus was not consistently associated with incentive system usage. Its strongest relationship was
with profit sharing (r=.12) and in that regression the service versus manufacturing variable,
which has a .43 correlation with international product market focus, is a significant predictor of
profit sharing.
Discussion
There is strong evidence that culture, as captured by the GLOBE dimensions, has a strong
relationship to incentive pay systems employed by organizations. This research extends our
24
understanding of culture and incentive pay systems in a number of ways. First, we utilize the
GLOBE culture scales while previous research has used the Hofestede measures. There are
differences between those frameworks and our results help us to better understand those
differences. Second, our results help us understand the importance of culture fit and differing
forms of incentive pay. The results for individual performance based systems are different for
organizational performance based systems, notably profit sharing. Third, we use a statistical
approach that focuses on effect size versus simple statistical significance. For example, the
widely referenced Schuler and Rogovsky (1998) research used the statistical significance
Kendall-Tau correlation coefficients to inform their conclusions. With the large sample size that
we have, a correlation slightly higher than zero is statistically significant. Our approach
addresses the effect size question while controlling for high intercorrelations between culture
dimension measures.
These results provide clear support for the institutional influence of culture. Given the
multiple factors that logically influence a given firm’s decision to implement a particular payfor-performance system, we think that achieving R2 values of .09 to .22 is an unequivocal
statement about the strong influence of culture in shaping HRM design decisions. While we
recognize that there are additional dictates and legitimacy constraints from the institutional field
that stem from regulatory and cognitive sources, it is surprising that culture variables alone
explained as much variance as they did without including other institutional directives.
For different incentive pay systems, we found that different culture dimensions have
varying levels of influence and this provides insight into the relative merits of the GLOBE versus
Hofestede’s conceptualization of culture. Looking across the five incentive systems included in
this study, in-group collectivism is the weakest. The institutional collectivism dimension was
25
sometimes more influential (particularly in the case of the performance pay and share system
regressions), but was not as consistently strong compared to other culture dimensions. This is
surprising given the considerable focus on Hofestede’s individual-collectivism dimension in the
literature. The GLOBE framework splits this Hofestede dimension into two distinct constructs.
The two GLOBE collectivism measures tend to exert influence in opposing directions. With the
exception of share scheme system results, the institutional collectivism dimension, which is more
focused on larger or macro societal collectivities, tends to be associated with the decreased use
of incentive systems. Conversely, the in-group collectivism measure, which is focused on
smaller groupings or collectivities with which individuals have a direct association, tends to have
an influence that is either neutral or associated with the increased use of incentive systems.
These results support the use of two distinct forms of collectivism seen in the GLOBE
framework versus the Hofestede approach.
Arguably the power distance dimension, like institutional collectivism, also has a
relatively modest, but significant, influence on shaping incentive system design around the
globe. The strongest impact of this dimension is seen in organizational performance based
systems (profit sharing and share schemes), but it is only in the case of team bonus systems that
it is not a significant predictor. For organizational systems in particular, upper hierarchical
authorities set the rules and control when and how employees get a payout. They clearly drive
the system. Schuler and Rogovsky’s (1998) research found a negative relationship between
Hofestede’s power distance measure and the use of individual performance based bonus and
commission systems in one data set and no relationship in a second. In our results with the
individual bonus incentive system dependent variable, we see a small positive relationship that
moves to non-significance when controls are added. But, while its contribution is modest in more
26
individual or team performance based systems, it is never significantly negative. With individual
bonus systems, the top echelon may set the general rules and design but middle managers and
first-level supervisors have more influence in how this system is implemented and this factor
may create a minor point of tension in high power distance cultures. While these results deviate
from Schuler and Rogovsky’s finding for individual incentive systems, they do confirm their
finding that increasing power distance culture is consistent with the increasing use of
organizational performance based incentive systems.
Performance orientation and future orientation culture dimensions are consistently
significant and positively associated with the increased use of all incentive practices except team
bonus systems. Increasing the use of four out of the five incentive systems is likely to be seen in
cultures marked by higher levels of these culture dimensions. The influence of these two culture
dimensions is the strongest relative to other dimensions. They are consistent in their influence on
varying forms of incentive system usage. The future orientation dimension is related to
Hofestede’s long-term orientation, which was not in his original culture framework and has not
been used in incentive pay system research. Performance orientation is not directly linked to
Hofestede’s theory of culture. The finding of the strong influence of these two culture
dimensions is a significant contribution to both the HRM and societal culture streams of
research. We conclude that these additions, particularly the performance orientation dimension,
inform our conceptualization of societal culture in a substantive way.
Uncertainty avoidance is another influential dimension of culture in understanding how
culture shapes incentive system design. With two major exceptions, increasing levels of
uncertainty avoidance in the culture is associated with decreasing usage of pay-for-performance
systems. Uncertainty avoidance cultures seek for more predictability and certainty than these
27
systems often provide. Pay-at-risk incentive systems have an inherent level of uncertainty. This
is most true in individual bonus system where managers’ discretion add uncertainty and share
scheme systems where many market externalities contribute to uncertainty and can lessen the
employees’ sense of predictability and control. For the performance pay system dependent
variable, the results are more mixed, but provide some support for a negative relationship. As
was the case with other culture dimensions, team bonus systems usage was unrelated to
uncertainty avoidance. This exception is not surprising given other results with this incentive
system. However, the results in the profit sharing regression produced contradictory results.
Uncertainty avoidance has a consistently strong positive relationship to the increased use of
profit sharing. Arguably, the design of profit sharing systems has only one element of
uncertainty: the level of the firm’s profit. Other factors are largely predetermined and provide a
measure of certainty and predictability (unless one fully appreciates the discretion that firm’s
have in applying standard accounting rules to determine the level of profits). Also, for most firms
profit sharing is a clear add-on to base pay and benefits that is generally not substantial compared
to base pay. Profit sharing may be an area where firms in high uncertainty avoidance cultures can
exercise agency and accommodate competing institutional logics, such as those stemming from
globalization and the more general dominate economic view that incentives are a good business
practice. While broad scale pay-for-performance systems with high managerial discretion
provoke too much uncertainty, a smaller scale supplemental profit sharing system might be an
acceptable strategy for accommodating the pressure for pay-for-performance from other
institutional stakeholders, including the cross-border norms of a given industry and the implied
“right way to manage” from more dominant economic powers.
Conclusion
28
Understanding and charting the socio-cultural landscape of HRM is important to
organizational leaders who must negotiate these fields and academics who must develop theories
and conceptual guides that correspond with those realities. This research provides managers and
academics with insight into the use of different incentive practices across several different
dimensions of societal culture. This will help human resource managers to gain a greater
understanding of how societal culture constrains and shapes their choices. It will also help
academics develop a more grounded view of how culture directs and constrains the selection of
incentive pay HRM practices in different societal settings. Clearly different societal culture
dimensions have an important influence on incentive system adoption seen across the world.
There is no evidence to suggest that globalization of business is somehow diminishing the
influence of a country’s culture. If businesses in the 14 countries are converging to a uniform set
of best incentive pay system practices, we would not have seen the explanatory power of
differences in culture dimensions that our analysis achieved in explaining the use of five quite
different approaches to incentive pay.
This study is not without its weaknesses. While it has the strength of capturing the
patterns of incentive pay practices from a substantial number of firms from a wide range of
countries and world regions, it is a cross-sectional look at firms from an arm’s length
perspective. An intensive study of a few firms over time will provide a nice supplement to this
study. While the CRANET study is well established in Western Europe, the extension of this
survey process to other countries, notably Japan and Taiwan and Eastern Europe, is new. While
the sampling frames that are designed to capture a sample that is representative of the economies
of each country have been demonstrated overtime in countries with a long participation record,
we cannot comment on how well this was achieved in the new country additions. Are the
29
samples drawn from those countries representative? According to the CRANET survey
guidelines they should be. However, we would like to hear more about the administration of this
survey in those countries.
30
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34
Table 1. Descriptive Statistics
Scales
Mean
S.D.
Range
N
1
2290
.80
2
3
4
5
6
Intercorrelations
7
8
9
10
11
12
13
14
1. Individual
Performance Bonus
2. Team Bonus
.61
.40
0-1
.40
.43
0-1
2235
.32
.85
3. Performance Pay
.47
.45
0-1
2273
.31
.23
.90
4. Profit sharing
.30
.41
0-1
2119
.06
.01
.16
.92
5. Share Schemes
.23
.38
0-1
2113
.18
.11
.06
.08
.94
6.34
1.59
0-1
2367
.13
.06
.05
.01
.21
---
.52
.50
0-1
2378
.04
.03
.05
.12
-.01
.05
---
.48
.50
0-1
2065
-.02
-.05
-.02
.17
.03
-.01
.43
---
3.10
1.91
0-6
2101
-.10
-.07
-.17
-.14
-.01
.22
.02
.17
---
4.49
.66
1-7
2396
-.14
-.03
-.14
.11
-.12
.11
.15
.08
.28
---
4.07
.38
1-7
2396
-.02
.01
-.11
-.08
.08
.22
.01
-.01
.27
.77
---
5.02
.43
1-7
2396
.13
-.01
.24
.19
.03
-.05
-.01
.05
-.32
-.54
-.60
---
4.09
.38
1-7
2396
.10
.02
.05
.23
.18
.16
.06
.04
-.12
.47
.60
-.31
---
4.50
.66
1-7
2396
.19
.04
.21
.10
.16
-.08
-.03
.05
-.28
-.75
-.64
.64
-.19
---
4.36
.61
1-7
2396
.01
.01
-.24
-.16
.26
.20
-.15
-.04
.31
.30
.65
-.48
.41
-.28
6. Log of Size
7. International Product
Market Focus
8. Service Versus
Manufacturing
9. Union Intensity
10. GLOBE: Uncertainty
Avoidance
11. GLOBE: Future
Orientation
12. GLOBE: Power
Distance
13. GLOBE:
Performance Orientation
14. GLOBE: In-Group
Collectivism
15. GLOBE: Institutional
Collectivism
35
15
---
Table 2. Regression Analyses
Individual Bonus System
β
β
β
β
Control Variables:
Log of size
International Market
Focus
Service vs.
Manufacturing
Union Intensity
---
---
---
---
---
---
---
---
Team Bonus System
β
β
β
β
.14***
---
---
.05
---
---
-.03
-.04
---
-.02
-.02
-.23***
.24***
.13***
.06*
Performance Pay System
β
β
β
β
.10***
---
---
.08**
.10***
.02
.02
---
---
.02
.01
---
-.04
-.04
---
---
-.05
-.05*
---
---
-.08**
-.08**
---
---
.01
.02
-.13**
-.12**
-.06
-.06
-.02
---
.16**
---
.09
-.06
-.06
-.06
.09***
GLOBE Culture:
Uncertainty
Avoidance
Future Orientation
-.23***
.30***
-.11**
---
---
-.21***
-.05
-.21***
-.07
.40***
---
.35***
---
-.06
.11***
.11***
.11**
.12**
Power Distance
.07*
.07*
.05
.06
Performance
Orientation
In-Group Collectivism
.12***
.19***
.10**
.16***
.01
.05
-.03
-.01
.12***
.21***
.11**
.20***
.16***
.10**
.15***
.10*
.06
.03
.05
.03
.16***
.08*
.13**
.05
-.09**
-.03
-.05
-.02
-.38***
-.23***
-.40***
-.27***
.01**
2100
.00
2100
.01**
1558
.01**
1558
.14***
2336
.11***
2336
.14***
1739
.12***
1739
Institutional
Collectivism
Adjusted R2
Sample Size
-.10**
.08***
2146
.02
.06***
2146
-.08*
.09***
1595
.02
.08***
1595
* p < .05
**p < .01 *** P < .001
36
Table 3. Regression Analyses
Profit Sharing System
β
β
β
Control Variables:
Log of size
---
---
International Market Focus
Service vs. Manufacturing
Union Intensity
-------
-------
GLOBE Culture:
Uncertainty Avoidance
Future Orientation
Power Distance
Performance Orientation
In-Group Collectivism
Institutional Collectivism
Adjusted R2
Sample Size
.52***
-.52***
.22***
.37***
.08*
.00
.22***
2119
.31***
--.22***
.26***
.18***
-.20***
.18***
2119
β
Share Scheme System
β
β
β
.01
.01
.12***
-.03
-.02
.02
.12***
-.05
.43***
-.43***
.19***
.35***
.05
-.04
.22***
1575
.27***
--.18***
.24***
.14**
-.20***
.19***
1575
---
---
-------
-------
-.26***
.09*
.08**
.17***
.08*
.28***
.16***
2113
-.23***
--.08**
.19***
.07
.32***
.16***
2113
* p < .05 **p < .01 *** P < .001
37
β
.16***
.03
.03
.01
.17***
.02
.03
.02
-.29***
.07
.06
.16***
.05
.26***
.19***
1567
-.26***
--.07
.17***
.04
.29***
.19***
1567
Table 4. Summary of Results
Hypothesis
4a
Cultural
Dimension
Performance
Orientation
Performance
Orientation
Performance
Orientation
Performance
Orientation
Performance
Orientation
Future
Orientation
Future
Orientation
Future
Orientation
Future
Orientation
Future
Orientation
Power Distance
4a
Power Distance
4a
Power Distance
4b
Power Distance
4b
Power Distance
5a
Institutional
Collectivism
Institutional
Collectivism
Institutional
Collectivism
Institutional
Collectivism
Institutional
Collectivism
2a
2a
2a
2b
2b
3a
3a
3a
3b
3b
5a
5a
5b
5b
Incentive
System
Individual Bonus
System
Team Bonus
System
Performance
Pay System
Profit Sharing
System
Share Scheme
System
Individual Bonus
System
Team Bonus
System
Performance
Pay Systems
Profit Sharing
System
Share Scheme
System
Individual Bonus
System
Team Bonus
System
Performance
Pay Systems
Profit Sharing
System
Share Scheme
System
Individual Bonus
System
Team Bonus
System
Performance
Pay Systems
Profit Sharing
System
Share Scheme
System
Predicted
Relationship
Positive
Observed
Relationship
Positive
Hypothesis
Supported?
Supported
Positive
Not Supported
Positive
No
Relationship
Positive
Positive
Positive
Supported
Positive
Positive
Supported
Positive
Positive
Supported
Positive
Mixed
Weak Support
Positive
Positive
Supported
Positive
Negative
Not Supported
Positive
Mixed
Weak Support
Positive
Mixed
Weak Support
Positive
Not Supported
Positive
No
Relationship
Positive
Positive
Positive
Supported
Positive
Positive
Supported
Negative
Mixed
Not Supported
Negative
Mixed
Not Supported
Negative
Negative
Supported
Positive
Mixed
Weak Support
Positive
Positive
Supported
38
Supported
Supported
Table 4 (continued). Summary of Results
Hypothesis
6a
6a
6a
6b
6b
7a
7a
7a
7b
7b
Cultural
Dimension
Uncertainty
Avoidance
Uncertainty
Avoidance
Uncertainty
Avoidance
Uncertainty
Avoidance
Uncertainty
Avoidance
In-Group
Collectivism
In-Group
Collectivism
In-Group
Collectivism
In-Group
Collectivism
In-Group
Collectivism
Incentive
System
Individual Bonus
System
Team Bonus
System
Performance Pay
Systems
Profit Sharing
System
Share Scheme
System
Individual Bonus
System
Team Bonus
System
Performance Pay
Systems
Profit Sharing
System
Share Scheme
System
Predicted
Relationship
Negative
Observed
Relationship
Negative
Hypothesis
Supported?
Supported
Negative
Not Supported
Negative
No
Relationship
Mixed
Negative
Positive
Not Supported
Negative
Negative
Supported
Negative
Positive
Not Supported
Negative
Not Supported
Negative
No
Relationship
Mixed
Positive
Mixed
Weak Support
Positive
Mixed
Not Supported
Weak Support
Not Supported
Note:
1. Hypothesis 1 provided the general argument that culture dimensions will explain
significant variance in the usage of each incentive pay system. This hypothesis is clearly
supported in all cases except team bonus incentive systems.
39