chapter  11
16 Pages

Compensation and national culture

WithBARRY GERHART

The study of compensation includes work on its measurement, determinants and consequences. Contextual factors may act not only as determinants, but also as contingency factors in influencing a firm’s choice of compensation strategy, as well as the consequences of that choice for the firm’s effectiveness (Gerhart and Rynes, 2003; Gomez-Mejia and Balkin, 1992; Milkovich, 1988). Key aspects of the context include external factors such as regulatory, institutional (e.g. labor unions) and market factors, as well as internal factors such as organization characteristics (e.g. strategy) and employee characteristics. In this chapter, I focus on the role of one aspect of context, national culture, and its relevance to compensation.