A Critical Examination of Hofstede’s Thesis and its Application to International Reward Management By Flora Chang
Purpose – The purpose of this article is to study and examine Hofstede’s thesis and to test his findings using a cross-cultural comparison of reward preferences in four different countries around the world.
Data/Methodology/Approach – This study used data collected from four countries – Hong Kong, Canada, Finland and the UK. Data was collected from over 120 companies in the banking industry and over 1,000 people at all different levels were used with different backgrounds. The study used both qualitative and quantitative methods to investigate reward preferences. Hypothesis 1 (H1) and 2 (H2) stated, respectively, that ‘Individuals in masculine and individualistic countries should have a stronger preference for financial and individual-based performance rewards.’ H3 stated that ‘Individuals in high uncertainty avoidance countries should have a stronger preference for fixed reward types and non-performance based rewards.’ H4 stated that ‘Individuals in high power distance countries should have a stronger preference for group and non-performance based rewards.’
Findings – Hypotheses 1-4 predict differences in employee preferences for financial versus non-financial types of rewards, performance versus non-performance types of rewards, and individual versus group-based rewards across cultures. H1-H4 were tested by comparing mean scores for each reward type. Intrinsic rewards were more valued than financial rewards. This says that the idea that masculine and individualistic countries value financial rewards more is wrong. There was also a common preference for individual performance incentives, regardless of culture that made Hypothesis H3 not fully supported. Canada and the UK share many cultural terms, they were very different when it came to intrinsic rewards. Canada and Finland have very different cultural values, but they were very similar...
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