ABSTRACT
This chapter explores some implications for reward strategy of the increasing globalisation of business organisations. A neglected area of research is the problem of how organisations take account of national characteristics and contexts in the design of reward systems. In considering pay design within an international context, we have to engage the debate about convergence and divergence in the rewards field. There are pressures to alter the level at which pay determination takes place, and there is an attack on the collective process in Japan and sectorwide agreements operated in Germany. Many tensions, however, are faced by organisations as they attempt to harmonise reward packages, notably the influence of national culture on pay systems. Rather than focus attention on the management of expatriate compensation and benefits, which has been a traditional focus in the international IHRM literature, this chapter analyses the factors that international organisations should consider when they make decisions about how to manage their rewards systems across national boundaries. A number of psychological factors, such as national value orientations, distributional justice, the concept of socially healthy pay, and the role of pay as a motivator, are considered.
