Cultural Issues

Cultural Issues- Two cultural issues affect international compensation systems; namely the local culture in which the organization operates and the corporate culture of the organization. Compensation programs that might be extremely effective in a home-country location will fail if they violate local cultural values. Industries that base their core compensation component, as well as motivator around pay-for-performance and individual rewards, may have their strategies backfire. The success of compensation approaches depends greatly upon the type of organization. This becomes clear in a comparison between compensation approaches of traditional service and responsibility drove structures in the “smokestack” industry with ownership driven structures of small, high-technology groups.

Cultural attitudes about motivation greatly influence the effectiveness of using rewards as a motivator. It is found that in group-oriented societies, motivations that focus on the fulfillment of group aspirations and potentials work best, while incentive programs like “Employee of the month” can create embarrassment. Hence, motivations that center on the group are more effective than those that recognize the individual. These programs are equally likely to fail in societies that nurture solidarity among colleagues, as individual recognition may evoke jealousy and resentment. Challenges involved in moving to a new culture include coping with the loss of familiarity and ways of feeling competent and worthy; perhaps a partial loss of identity and a need to build new comfort and support systems in unfamiliar surroundings. Informed support and guidance can make this task significantly easier by lessening the instability and clearing doubts about living in a new culture.

• Culture is the shared knowledge, behavioral norms, values, and beliefs that help people to live in families, groups and communities
• Broadly speaking, culture is the rules for interpreting experience
• Sometimes we refer to the group as “the culture”
• Cultures help define ethnic groups as people who share ideas, language and beliefs because they come from the same country place
• Cultures can also define groups within countries by:
• Religion (being Jewish)
• Occupation (the military)
• Regions (Southern culture)
• Other special statuses (gay and lesbian)

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