Managerial Pay Policies and Behavioural Consequences: A Cross‐Cultural Study

Abstract

Since the publication of Harbison and Myers' study, many management scholars have devoted their attention to managerial systems in different cultures around the world. However, the various studies in cross‐cultural management have been criticised for not having enough specificity and relatedness. This study is concerned with a very specific aspect of managerial lives, namely, pay. Within a broad theoretical framework, three propositions are related to the data collected from 545 middle managers in Britain and the US. The propositions are; that the degree of understanding of job objectives and the perceived importance of the individual's role are directly related to pay differentials (Proposition I); that this relationship has impact upon the perception of what are and what should be the criteria used for pay determination (Proposition II); and, that if the gaps between “are” and “should be” are large, then the responses on behavioural option indices will be largely negative (Proposition III). The propositions are generally supported by these data. Implications of the findings are also discussed.