Cross Cultural Influence on Rewards Behaviour

MBA IT Cultural Influence in Pay and Motivation Behaviour

Student ID: 2977269

Staff : Terrence Brathwaite

Cultural Influence in Pay and Motivation Behaviour 2010

Introduction:

Human resources management is unique and most integral part of any organisation that comprises of a number of employees working in groups towards the objectives and goals of an organisation. The human resources within the organisation monitors the administrative activities including recruiting the potential employee, training the employees, implanting strategies, payroll processing and in overall personnel mentoring.

The term “Human Resources” have greatly replaced organisational “personnel management” with the range of service they offer and due to its constantly evolving nature.

The human resources bridge the huge gap between the employees, the manager and the overall organisation. The provision offered by human resources is both strategic and coherent. The strategic human resources consist of well planned strategies which helps the organisations to move rapidly in the direction of long and short term goals. The coherent approach of human resources helps the organisations based on reasons and accomplishments.

Brief layout of my study:

This section primarily comprises of four parts

1) Cultural influences that I incurred in Socometal Case study2) The context of Thierry’s hypothesis in Socometal 3) Insight of cultural influence and rewards behaviour in India4) Contemporary and traditional HR practices in the Indian way

Cultural influences that I incurred in Socometal Case study:

Irrespective of culture people around the world have different beliefs and practices, however the cultural influences that incurred in Socometal is yet another example of how different people think differently. The Socometal is a basically a metal and can company situated in Senegal (West Africa), This particular plant of Socometal is under joint venture with French management with a major share of 52%, where as the rest of 48% still under home governance. However, the overall administration is controlled by African work policies and principles. The employees in Socometal are mostly West Africans and only few Heading managers coming from France.

In general French and Italian managers believed African workers in Socometal are real hard workers but they never turned on to work up to their fullest ability, the employees were forced many a times to produce the required target by their

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managers and even warned that they will be fired from the organisation if the employees continue to underperform, but nothing turned positive to the management, in contrast the employees commented on the management. Africans did not consider pay as a means of motivation factor for them to do their intended work, they just considered their job only as utility for earning money they want for life. ‘Simply Africans traded their time for money’.

Every employee in the organisation must work towards the objectives and goals of the organisation with regardless to his personal issues and external factors; it is an untold ethic and is quite commonly followed by employees around the world. The work that the African employees are performing is considered to be a “Cultural Influence” restricted to their society and are not ready to improve their performance for anything. Africans in Socometal at one stage agreed to give the production with regards to increase in their wage. This shows that the African workers considering the excess wage as a “motivational factor”. Added to that the employees believed they have got the right time to disprove the opinion of their managers, this depicts culturally narrow-minded nature of African workers. If they really wanted to disprove their manager’s opinion they should do so in the very beginning and cannot let the actual reason lie beneath their perceived actions.

African employee’s compares and positions Mr. Bernard the French production manager with Senegalese Asst production manager Mr. Diop being friendly to the employees and polite in getting the work done. There is no point in employees comparing one manager with the other, when they have their tasks assigned, this shows that the employees positions their likelihood Diop with good perception and confines culturally different Bernard.

The cultural perception found in employees, also found in the likelihood Asst manager diop when he was smashed by Bernard for his absurd decision on rewarding the employees with excess wage without his consideration, this illustrates a clear miss-interpretation of “decision making” and “rewards behaviour” between two different managers from different ethnic background.

“The reasons for confusion among international managers and academics about the role of national culture in rewards fields are obvious” (Sparrow and Hiltrop, 1997; P.102)

Degree Of state ownership Influences the extent to which pay rates may be regulated and controlled

Average Size of Organisations Influences the level of formality built in to wage system

Business System influences on rewards behaviour (Brewster &Harris, 1999; P.103)

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The context of Thierry’s hypothesis in Socometal

According to business experts and employees irrespective of nation, culture, beliefs and practices, pay and rewards play an integral part of their work life cycle. Though the pay and reward system itself differs from one nation to another, certain organisations needs their employees to be independent and self motivative whereas some organisations needs team work and co-ordination within their employees to complete a specified task

“An integrated human resource management strategy that is consistent in the way that it encourages people to behave, attracts the kind of people that can support the business strategy” (Smith, 1992; p.172-173)

The most essential and critical way of rewarding the employee is by means of pay. According to Thierry “pay is meaningful to the employee precisely because it conveys information about important aspects of employment other than pay” (Thierry, 1992). Pay conveys a message to each and every employee about the awareness of the access to external welfare, in particular it emphasises on the employee’s contribution to their organisation, and the way how the organisation reward their employees based on performance and achievement.

Thierry’s hypothesis critically appraises pay in terms of four categories:

1) Salient Motives : pay plays a vital role in employees expectations towards achieving his/her expected goals and helps the employee to overcome insecurity of competence for opportunities and self-realization – this reflects the “motivational properties of pay”

2) Relative position: Relative access to the employee’s performances with pre-set objectives and goals Vs the performance shown or key progress made by the employee during the particular period. The effect of this would be the comprehensive feedback on employee’s performance in comparison to other employees of the same dept.

3) Control Pay: Control pay provides a degree of control over the employee’s workplace and behavioural activities other than the job objectives. Control pay encompasses the employee towards floor rules, dept behaviours, and influencing co-workers and even clients. This also instructs the employee about the active pay scale system and composition of compensation that the employee receives which reflects the variation in degree of control toward other employees.

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4) Spending Pay: The spending pay is unique and slightly different from the above three pay categories. This provides ease of access to the employees towards purchasing products and services. This is simply employee perceived meaning of pay against their spending capacity.

Socometal in accordance with Thierry’s four categories of pay system, the employees of Socometal consider their (Perceived) increased pay as a Motivational factor for increased production by working hard with an increase in their working time. Thus it shows that they have the ability to work hard and give more production units but they didn’t show this before as there is no “motivating factor”. But, each and every employee in any organization must work towards the goal of the company not just for pay. They should work towards the work standards and work ethics where they should meet the company’s values and goals.

African employees feel that the French manager is arrogant and they feel a cultural ease with a co-worker who belong to same ethnic group. This creates a cultural gap between employee-employer relationships which thereby resulted in cultural conflict. African employee’s compares and positions Mr. Bernard with Mr. Diop being friendly to the employees and polite in getting the work done. diop has cultural perception when he was smashed by Bernard for his absurd decision on rewarding the employees with excess wage without his consideration, this illustrates a clear miss-interpretation of “decision making” and “rewards behaviour” between two different managers from different ethnic background, This perfectly attributes the “Relative position” of Thierry’s hypothesis.

“The general trend for managers (both manager’s perceptions of themselves and of other managers) to believe less that achievement is based on external influences and more that if motivated anything can be achieved” (Jackson, 2004; p.136)

To get the required work done by the employees, Mr Diop to provide the excess pay requested by the employee without the consideration of his line manager Bernard, organisational hierarchy and principles must be followed while taking critical decisions. The cultural perception found in employees, also found in the likelihood Asst manager diop when he was smashed by Bernard for his absurd decision on rewarding the employees with excess wage without his consideration, this illustrates a clear miss-interpretation of “decision making” and “rewards behaviour” between two different managers from different ethnic background. This is a clear illustration of “control pay” which differentiates one manager from another and their levels of control over the employees.

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Africans did not consider their actual pay as a means of motivation factor for them to do their intended work until they were given the perceived (increased) pay, they just considered their job only as utility for earning money they want for life. ‘Simply Africans traded their time for money’. Africans perceived to earn only for what the needed to spend. This becomes the “spending pay” of Thierry’s hypothesis

Insight of cultural influence and rewards behaviour in India:

The management style in India is highly structural and enormously hierarchical society this makes India considerably the most hierarchical management system in the world, this obviously induces cultural influence and rewards system. In the contemporary Indian style of management, the manager certainly expects to have high amount of control over their team members especially over compensation “Rewards behaviour” and behavioural activities or floor discipline “Cultural influence”

“Psychological theory and research suggest that the link between individual behaviour and performance is a more complex process” (Bratton & Gold, 2001; p.240)

The manager remains implicit to the organisation, he is expected to give away a set of explicit instructions, even if everyone knows that the instruction itself seems to be incorrect, vague actions are entertained. The contemporary Indian management style is total contrast to western kind of management

“The design and management of reward systems constitute one of the most difficult HRM tasks for the General Manager” (Beer et al., 1984; p.113)

. The reward system differs from one culture to another. In western culture employees are generally rewarded for being independent and competitive, whereas Asian culture expects the employees to perform as a group and show team co-ordination. Therefore National culture helps to determine diversified patterns of behavioural similarity among employees, although national culture has an impact on the development of employees’ personalities, not all individuals respond to cultural influences equally.

“The National culture influences the effectiveness of various pay formulae and techniques” (Gomez- Mejia & Welbourne, 1991)

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Job satisfaction; self fulfilment

Merit increases, performance

bonus

Pride in organizational membership

Group insurance plan; cost of

living increase Extrinsi

c Extrinsi

c


Herzberg’s two-factor theory

1) Motivation Factor2) Hygiene Factor

Source: Based on Steers and Porter, 1991

Motivation Factor:

The motivation factor is otherwise called as intrinsic factor, since it corresponds to characteristics of job itself. This motivational factor includes employee satisfaction and employee motivating factors such as Job security and recognition. To fulfil this theory properties Herzberg suggests “job enrichment”. People in India are highly relayed on this motivational factor due to job security concerns and family commitment.

Hygiene Factor:

The hygiene factor is otherwise called as extrinsic factor and corresponds to characteristics external to job profile. This relates compensation, floor discipline, employee-employer relationship and other benefits. The Indian way of employee recruitment looks forward to hire character-based and attitude-oriented. This way of recruitment provides a sort self relaxation for the employer during recession times and other

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Collectively offered

Individually offered

Intrinsic


“Motivational factor: According to Thierry’s hypothesis Pay should carry a meaning of motivational properties” (Thierry, 1998; P.132)

Cultural Values Rewards Behaviour

Differences in the attitudes and definitions of what makes an effective employee and the associated qualities that are recruited, trained and developed

Influence the effort put towards, and value of, specific competencies within the labour market

Different styles and attitude to the giving of face-to-face feedback and associated behaviours in interview, communication, negotiation and participation processes

Influence the extent to which power and influence over rewards issues will be ceded to one-to-one FORA

Differences in internal career anchorsInfluence the attractiveness of different advancement and mobility patterns within labour market

Different expectations of the manager-subordinate relationship and their impact on performance management and motivational processes

Influence the perceived validity and attractiveness of the performance-related pay system, incentive programs

Cultural value influences on rewards behaviour (Brewster &Harris, 1999; P.104)

Hofstede’s 4 dimensions of culture:

According to Hofstede, cultures are classified in different ways according to language, location, economical and political, etc. There is a clear linkage between organizational and national cultures, which is very well explained in 4 different dimension by Hofstede

1. Power distanc e: Hofstede defined power distance as “the extent to which

less powerful members of institutions and organizations expect and accept that power is distributed unequally” (1991; P.28). Power distance refers to strong dependency towards the relationship, where in an organization people

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tend to be more dependant, there will be a hierarchical system of management, people tend to respect their superior boss, dissimilarity is usually accepted. Countries like India, tend to have high power distance when compared to western countries like US, Canada, etc. This will thereby cause a cultural difference in a multinational company when 2 different segment of power distance work together.

2. Uncertainty avoidance : this refers to the risk that usually involves in

relation to job security, deviant ideas of organization, etc. Countries like India, Germany disagree with uncertainty and therefore they look for more secure in their jobs, and will have strong belief in their knowledge, but in case of western countries like UK, Denmark people will have low uncertainty cultures where they will be ready to take any risk and will not or less abide by the rules, they will also have less chances of conflict and competition. In case of culture with high uncertainty avoidance, they will strictly follow the rules and will have a formal communication. The chances of conflict and competition are also high.

3. Individualism vs. Collectivism: this shows the characteristics of

individualist and collectivist group in a society. People who are individualist tend to look after they and their family and the chances of having greater attitude, achieving personal goals, ability to play adventure roles are high. But, in case of collectivist people they will look after each other who belong to certain groups and share knowledge within themselves. The chance of taking risk is less. “wealthy countries have higher individualism scores and poorer countries higher collectivism scores” (Hofstede, 2001; P. 209)

4. Masculinity/femininity : the influence of male and female domination

varies in different cultures, In countries like India, feminine character is meant for caring for their society and work towards the quality of life, whereas in western culture, they give equal importance to both male and female, who work towards achieving their personal goals

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Cultural influence on Maslow’s Hierarchy of needs:

Source : http://docsiva.wordpress.com/2009/01/03/web20-and-the-nature-of-man/

Maslow created 5 hierarchy of needs which includes physiological needs like fundamental requirements of food, water, air. Safety needs include place to stay and safety needs. Affiliation includes relationship with others, affectionate, etc. Esteem needs include prestige issue, status in the society, and recognition from others. Finally, self-actualization which includes reaching one’s target and working to the fullest.

With regards to organizational viewpoint, every employee can satisfy their physiological needs by providing free food. Safety and security needs of employees can be fulfilled by providing job security and free shelter such as housing boards. Affiliation needs can be fulfilled by making employees to work in team, and making them to indulge in team events or other social events sponsored by the organisation. Self-esteem needs can be met by providing regular performance appraisals and reward system. Lastly, self-actualization needs of an employee can be fulfilled by providing them with responsible and growth-oriented work in which they deserve.

According to Maslow, when a level of need is accomplished, the requirement moves to next level with no more motivational factor playing an active role in it. But in internationalisation point of view, the hierarchical level and the importance of these needs will get altered based on the values and fact of a particular culture. Based on

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http://docsiva.wordpress.com/2009/01/03/web20-and-the-nature-of-man/


Hofstede’s dimensional value of culture, these hierarchical needs will also get altered. If a culture is collectivist nature, the need for self-esteem and self-actualization would be insignificant when compared to individualist nature of culture where these needs are relevant. Hence, this Maslow’s theory will be useful for Managers but the order will not motivate the employees in same way as like others. If a Manager understands what needs are essential and the order in which employees are influenced in a particular culture will give a clear insight for motivating the employees.

When discussing Maslow’s concept of theory and in particular the concept of hierarchy of needs, Francesco and Gold suggest: “In an international context the circumstances and values of a particular culture can influence the ordering and importance of needs. The values of individualism and collectivism can make the hierarchy more or less relevant”

Conclusion:

After analysing with the in depth study of Socometal case study and its relation to Thierry’s hypothesis we can visualize a clear picture of cross culture influence and its effects over rewards system, especially between the characters Mr. Bernard and Mr. Diop, employees nevertheless show their cultural influence by trading their time form money and not actually performing well, with all the above analysis we conclude with the following key points

When dealing with colleagues or clients from a different ethnicity, we need to make sure – that we use both our own approach and the approach of the others culture

Most people tend to communicate within their cultural groups and try to interact with every other culture people

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Recommendations:

There are various factors that can be considered in to organisational structure which can help the organisations prevent cultural conflicts and nourish the organisation to grow globally provide job satisfaction to the employees with friendly and social environment and co-operative peer groups.

1. Individual factor : This includes discovering each and every individual’s

inbuilt skills, intelligence, educational qualifications, developing the identified skills, providing opportunities and supporting their initiatives

2. Social factor: This indicates the employee-employer relationship, friendly

and familiar organisation structure

3. Cultural factors : this includes respecting the underlying beliefs and the

values of cultures each and every individual pursue

4. Organisational factors : include working environment, Human

Resources policies, Achievable goals and generalised ethics, strategic leadership styles, and flat management system.

5. Environmental factors : understanding the societal need of the

employee and non-governmental influences

6. Compensation Factor : benchmarking the compensation and according

to market standards at regular intervals

7. Opportunity to express : All the employees must be given equal

opportunity to express their views on improvements criteria and implication

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Cross Cultural Influence on Rewards Behaviour

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