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Lecture 9: Reward
Reward is important because People are the largest single operating cost item of most
businesses and there is also a need motivation to engender their active commitment or
engagement (Brewster et al., 2011, p. 211)
However, expectancy theory (Vroom, 1964) suggests that motivation and performance are
shaped by the links between effort and reward and by the significance or valence of the
reward to the person in question.
Cross-cultural theory (e.g. Hofstede, 1980, 2001) suggests that socio-cultural contexts
influences valence
Therefore, MNCs must be aware of these differences when they determine their
policies and practices in reward as in other areas.
Though strategic space (Vernon, 2005; Vernon, 2010) for innovation in pay
practices is great, indications of patterns of international best practice in reward
are only starting to emerge and, crucially, they are not consistent with simple,
universalist idea about motivation.
See Brewster et al, 2011, Chap 10, Edwards and Rees, 2011, chap. 11
Some useful readings
Brewster, C., Sparrow, P., Vernon, G. and Houldsworth, E. (2011) International HRM,
3rd Edition, London: CIPD (Chapter 10)
Vernon, G. (2011) International and comparative pay and reward in T. Edwards and
C. Rees (eds.) International HRM: Globalization, National systems and Multinational
Companies, 2nd Edition, London: FT Prentice Hall (pp. 206-228)