ABSTRACT
This chapter concentrates on the issue of the national distinctiveness of pay-for-performance systems from the cultural perspective, before focusing on the institutional contexts of rewards and then building on path dependence theory. It discusses the cross-national transfer of the respective pay schemes, by building on the neo-institutional theoretical perspective. The chapter presents the specific issues of pay-for-performance schemes in multinational enterprises (MNEs) in Europe. Practitioner-oriented and academic research alike have underscored the country-specific differences related to typical pay-for-performance schemes implemented across the world. The discussion on pay-for-performance in multinational corporations typically relates to the assumptions of country-of-origin effects and the related discussion on the localization and standardization of pay practices. The neo-institutionalist perspective, in particular the theory of institutional isomorphism coined by DiMaggio and Powell, offers an explanation for such confirmed or suggested convergence. The chapter suggests that large MNEs will play an important role, mainly stemming from developed industrialized countries.
