"Individualism versus Collectivism is an important cultural value concerning its influence on the reward system design in a way that Individualism favours the performance-based reward system, whereas Collectivism emphasizes job security, group rewards and internal equity ... Is it possible to introduce the performance-based reward system within the collectivistic cultural context, and, if it is possible, how?" Biljana Bogicevic Milikic (Belgrade/Serbia) proposed following her research findings "that Collectivism strongly influences the employees` equity perceptions, but is not necessarily unable to coexist with the performance-based reward system."
The case study found that employees in the collectivistic culture of Serbia "expressed satisfaction and great level of acceptance of performance-based pay. Employees expressed dissatisfaction only with the size of individual incentives, in a way that they should be larger. The main source of employees` pay dissatisfaction is the perceived internal inequity resulting from job evaluation and large span of base pay range. If span of base pay range is lower, and base pay differences are lower, findings indicate that the performance-based pay may be well accepted even within collectivistic contexts."
The study suggests "that it is possible to introduce the performance-based reward system within collectivistic cultural context, but under specific conditions. These conditions are related to the requirement to avoid a large span of pay range."
Pay and Reward Systems in Organizations – Theoretical Approaches and Empirical Outcomes
Antoni, Conny H.; Baeten, Xavier; Lucas, Rosemary; Perkins, Stephen; Vartiainen, Matti (Eds.)
