Merit Pay, Responsibility, and National Values: A U.S.–Taiwan Comparison

The extant U.S. domestic literature provides evidence that if administered in an unbiased manner, merit pay can be a significant motivator. However, the same literature shows that judgment biases can lead to over‐rewarding of “favored failures,” individuals who receive favorable treatment despite their poor performance. The cross‐cultural literature provides evidence that collectivist societies treat some portion of “merit” pay as salary rewarding both successful and unsuccessful performers with some merit pay. There has been no test in this literature of the treatment of “favored failures” but theoretical arguments and evidence from the cross‐cultural escalation of commitment literature suggests that collectivist societies may be less subject to the “favored failures” control problem. A “face” effect may offset the effect of collectivism in Chinese societies. Using a behavioral experiment and subjects from countries that are at the extremes of Hofstede's (2000) individualism‐collectivism spectrum (Taiwan...

[1]  Edwin A. Locke,et al.  Linking goals to monetary incentives , 2004 .

[2]  R. Brody,et al.  Prior commitment and the merit pay allocation process , 2001 .

[3]  Mark Keil,et al.  Why Software Projects Escalate: An Empirical Analysis and Test of Four Theoretical Models , 2000, MIS Q..

[4]  N. Lindholm,et al.  National Culture and Performance Management in MNC Subsidiaries , 1999 .

[5]  S. Carroll,et al.  Individualism/Collectivism Orientations and Reactions Toward Alternative Human Resource Management Practices , 1998 .

[6]  Randall S. Schuler,et al.  Understanding Compensation Practice Variations Across Firms: The Impact of National Culture , 1998 .

[7]  Paul Sparrow,et al.  Does national culture really matter? Predicting HRM preferences of Taiwanese employees , 1998 .

[8]  Marta A. Geletkanycz.  The salience of 'culture's consequences' : The effects of cultural values on top executive commitment to the status quo , 1997 .

[9]  Chee W. Chow,et al.  Escalating Commitment to Unprofitable Projects: Replication and Cross-Cultural Extension , 1997 .

[10]  Henry L. Tosi,et al.  Disaggregating The Agency Contract: The Effects Of Monitoring, Incentive Alignment, And Term In Office On Agent Decision Making , 1997 .

[11]  Joo-yup Kim,et al.  NATIONAL CULTURE AND THE FACTORS AFFECTING PERCEPTIONS OF PAY FAIRNESS IN KOREA AND THE UNITED STATES , 1997 .

[12]  David J. Sharp,et al.  Project Escalation and Sunk Costs: A test of the International Generalizability of Agency and Prospect Theories , 1997 .

[13]  Lee P. Stepina,et al.  Hofstede's Country Classification 25 Years Later , 1997 .

[14]  Henry C. K. Chen,et al.  A Multicultural Examination of Business Ethics Perceptions , 1997 .

[15]  Kenneth A. Merchant,et al.  The Use of Organizational Controls and their Effects on Data Manipulation and Management Myopia: A J , 1996 .

[16]  Kenneth A. Merchant,et al.  Measurement, evaluation and reward of profit center managers: A cross-cultural field study , 1995 .

[17]  P. Harrison,et al.  IMPACT OF 'ADVERSE SELECTION' ON MANAGERS' PROJECT EVALUATION DECISIONS , 1993 .

[18]  Louis White,et al.  Ethical dilemmas in organization development: A cross-cultural analysis , 1992 .

[19]  N. Adler,et al.  The Parochial Dinosaur: Organizational Science in a Global Context , 1991 .

[20]  John Dickhaut,et al.  Escalation Errors and the Sunk Cost Effect: An Explanation Based on Reputation and Information Asymmetries , 1989 .

[21]  Michael Harris Bond,et al.  Finding universal dimensions of individual variation in multicultural studies of values: The Rokeach and Chinese value surveys. , 1988 .

[22]  楊國樞,et al.  Chinese Values and the Search for Culture-Free Dimensions of Culture , 1987 .

[23]  M. C. Jensen,et al.  THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE , 1976 .

[24]  Barry M. Staw,et al.  Knee-deep in the Big Muddy: A study of escalating commitment to a chosen course of action. , 1976 .

[25]  D. Ho.  On the Concept of Face , 1976, American Journal of Sociology.

[26]  Joanna L. Y. Ho,et al.  The Openness of Knowledge Sharing within Organizations: A Comparative Study of the United States and the People's Republic of China , 2000 .

[27]  吳安妮,et al.  A Cross-Cultural Investigation of Managers Project Evaluation Decisions , 1999 .

[28]  S. Schwartz.  Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries , 1992 .

[29]  G. Hofstede,et al.  Cultures and Organizations: Software of the Mind , 1991 .

[30]  Stanley Baiman,et al.  AGENCY RESEARCH IN MANAGERIAL ACCOUNTING: A SECOND LOOK. , 1990 .

[31]  Mark L. Davison,et al.  Parametric statistics and levels of measurement : factorial designs and multiple regression , 1990 .

[32]  Gordon Redding,et al.  The psychology of Chinese organizational behaviour. , 1986 .

[33]  The Escalation of Commitment , 2022 .