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The reward systems of MNCs in various countries have been
extensively researched in the existing literature (see Alpander & Carter,
1991; Chiang, 2005; Chiang & Birtch, 2006; Chiu; et al., 1992; Coates, et
al., 1992; Nyambegera et al., 2000; Schuler & Rogovsky, 1998; Stredwick,
2000; Verburg, et al., 1999). However, detailed studies on the reward systems
of European MNCs, particularly Germany, have been limited (for exceptions, see
notably Kurdelbusch, 2002; Ferner, et al., 2001), despite their prominence in
the global economy (Ferner, et al., 2001). The existing cross-country
studies of reward systems in German MNCs typically evaluate these MNCs against those
from another developed country (Alpander & Carter, 1991; Fischer, 2004; Gunkel,
2006), and rarely against a developing country. Stehle & Erwee (2007) was
an exception, where the research compared HR policies of a German MNC in three
Asian countries (Singapore, Thailand and Indonesia), but the discussion on
reward systems in these countries were, at best, brief. Therefore, this paper
seeks to extend the existing empirical research and understanding of this
research area, with a focus on German MNCs with subsidiaries in a developing
Asian country, Malaysia. Recognising that the impact of rewards on employee
motivation may differ across cultures, this paper aims to explore the influence
of national culture on the impact of rewards on employee motivation.

While it is recognised that the relationship between
rewards and motivation may also be affected by a multitude of other factors,
including legal-political factors, corporate culture, macroeconomic environment
and competition (Appelbaum et al., 2011; Budhwar & Sparrow, 2002; Triandis
& Wasti, 2008), this research is directed towards understanding the impact
of national culture. This is guided by the views that the understanding of national
cultural idiosyncrasies is essential in designing HRM strategies, particularly
in rewarding employees in an internationalised business environment (?or?evi?,
2016; Triandis & Wasti, 2008; Trompenaars & Hampden-Turner, 1997), and
that national culture influences the motivation of individuals (Gunkel, 2006; Kanfer,
et al., 2008; Mirabela & Madela, 2013).

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In order to capture the nuances of national culture, the
paper applies Hofstede’s four cultural dimensions in Hofstede (1980). His study
is considered an extraordinary contribution to the field of social sciences (Bond, 2002). The two additional
dimensions (Confucian dynamism and indulgence vs. self-restraint) that were later
introduced by Hofstede in 1991 and 2010 were excluded from this paper,
following Chiang (2005), Chiang & Birtch (2006) and Thien, et al. (2014). While it is recognised that Hofstede’s model is
highly contentious (see notably Bond, 2002; Jones, 2007; Schmitz & Weber,
2014), his work is used as a guide in this paper as it is the most widely-cited
and methodologically rigorous work on culture (Chiang & Birtch, 2006; Bond,
2002; Hempel, 1998; Schmitz & Weber, 2014; Sumacoa, et al., 2014).
According to Fontaine & Richardson (2005), Hofstede (1980) has also been used
extensively in studies of the Malaysian culture (see notably Asma, 2005; Ken
& Cheah, 2012). 

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