International reward management: Paul R. Sparrow
Research on international compensation strategy has extended beyond expatriate compensation, to a larger group of the workforce. The chapter shows how the explanation of international diﬀerences in rewards management relies on either institutional or cultural explanations. Narratives around the Kostenkrise debate in Germany, and the Risutora process in Japan are examined to reveal the depth of knowledge that an in-country HR manager of a foreign multinational needs to understand the institutional web of inﬂuences on rewards behaviour. More recently, however, comparative analysis of rewards systems has attempted to understand the role of corporate strategy (across national contexts) and examine the workings of the ‘black box’ of internal labour markets and rewards behaviour. The chapter explores the theoretical links between national culture and rewards and reviews studies that link country-level national culture patterns to patterns of rewards practice, and studies that link national culture to important decision rules and attitudes within rewards systems.