The Performance Implications of Financial and Non‐Financial Rewards: An Asian Nordic Comparison

Abstract

abstractThis study empirically investigated culture's consequences on employee perceptions of the performance implications of financial and non‐financial rewards. Using a sample (n = 568) drawn from the banking industry in Finland and Hong Kong, we found that although the effects and predictive capability of culture (i.e. masculinity–femininity, individualism–collectivism, uncertainty avoidance, and power distance) offered some important insights, a range of other contextual factors (i.e. organizational, institutional, economic) wielded influence over and shaped reward–performance values, preferences, and behaviours. The emergence of these new paradigms necessitates that the US centric economic and behavioural theories (e.g. exchange) that underpin reward–performance be revisited and extended if they are to be applicable in the international context. Understanding the influence of a range of contextual forces is therefore critical to multinational organizations attempting to implement effective reward strategies aimed at achieving a diverse set of performance priorities. In addition to these novel theoretical and practical contributions, this study also paves the way for future research in this promising area of management studies.