The reward systems of MNCs in various countries have beenextensively researched in the existing literature (see Alpander & Carter,1991; Chiang, 2005; Chiang & Birtch, 2006; Chiu; et al., 1992; Coates, etal., 1992; Nyambegera et al., 2000; Schuler & Rogovsky, 1998; Stredwick,2000; Verburg, et al., 1999). However, detailed studies on the reward systemsof European MNCs, particularly Germany, have been limited (for exceptions, seenotably Kurdelbusch, 2002; Ferner, et al.
, 2001), despite their prominence inthe global economy (Ferner, et al., 2001). The existing cross-countrystudies of reward systems in German MNCs typically evaluate these MNCs against thosefrom another developed country (Alpander & Carter, 1991; Fischer, 2004; Gunkel,2006), and rarely against a developing country.
Stehle & Erwee (2007) wasan exception, where the research compared HR policies of a German MNC in threeAsian countries (Singapore, Thailand and Indonesia), but the discussion onreward systems in these countries were, at best, brief. Therefore, this paperseeks to extend the existing empirical research and understanding of thisresearch area, with a focus on German MNCs with subsidiaries in a developingAsian country, Malaysia. Recognising that the impact of rewards on employeemotivation may differ across cultures, this paper aims to explore the influenceof national culture on the impact of rewards on employee motivation.While it is recognised that the relationship betweenrewards and motivation may also be affected by a multitude of other factors,including legal-political factors, corporate culture, macroeconomic environmentand competition (Appelbaum et al., 2011; Budhwar & Sparrow, 2002; Triandis& Wasti, 2008), this research is directed towards understanding the impactof national culture. This is guided by the views that the understanding of nationalcultural idiosyncrasies is essential in designing HRM strategies, particularlyin rewarding employees in an internationalised business environment (?or?evi?,2016; Triandis & Wasti, 2008; Trompenaars & Hampden-Turner, 1997), andthat national culture influences the motivation of individuals (Gunkel, 2006; Kanfer,et al., 2008; Mirabela & Madela, 2013).In order to capture the nuances of national culture, thepaper applies Hofstede’s four cultural dimensions in Hofstede (1980).
His studyis considered an extraordinary contribution to the field of social sciences (Bond, 2002). The two additionaldimensions (Confucian dynamism and indulgence vs. self-restraint) that were laterintroduced 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 ishighly 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-citedand 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 usedextensively in studies of the Malaysian culture (see notably Asma, 2005; Ken& Cheah, 2012).