Explain what is meant by the need to design culturally appropriate reward systems? Give some examples

Explain what is meant by the need to design culturally appropriate reward systems? Give some examples

One of the determinants of the success of a company in the global market is the efficiency of a culturally diverse workforce. Incentives and rewards are critical to workforce motivation in a company. Therefore, appropriate systems must be put in place for a positive outcome. It means that in a culturally diverse workforce, the rewards system should conform to different cultures to motivate the employees effectively.

Although, in general, rewards may fall in financial, job content, career, job content, professional, and social status categories, the weight of each of the categories varies between countries.  For instance, in Japan, the reward and incentive systems are primarily based on superiority, and more weight is placed on the bonus system. Additionally, in Japan, there is a significant discrepancy between temporary and regular workforces, with regular employees receiving noticeably more rewards (both in pay and job allocation) than the temporary workers. Rewarding of individual employees is frowned in Japan as it is seen to encourage competition within the workforce rather than improve the group performance. On the other hand, recognition and affection are important in Taiwan. There, different departments strive for compliments from top-level management (Deresky, 2017). In the U.S, the reward system is merit-based. Similarly, in China, the reward system differs from those of other countries.  There, low-wage rates are recompensed for by medical care, free housing, and school.

It is clear that culture largely influences the design of apt incentives and rewards systems globally. Workforces from collectivist backgrounds such as Taiwan and Japan would not react well to new a rewards system like the typical U.S. merit-based reward as it is against their traditional value system. So, it would upset the harmony and corporate culture system (Deresky, 2017).  Thus, the need to implement strategic reward systems that are culturally appropriate.  Managers must recognize and understand the motivational patterns across different cultures to design and put in place appropriate rewards systems. The management should adjust the company’s reward system to conform to the employee’s value system for the successful motivation of a diverse workforce to improve performance.

11-5. Describe the variables of content and context in the leadership situation. What additional variables are involved in cross-cultural leadership? What are the major elements of a “global mindset?”

In the leadership position, the leadership content includes the traits of the leader, such as a leader’s experience and autonomy and the business decision. At the same time, the context consists of all other variables pertaining to the specific situation (Deresky, 2017), for example, cultural, economic, political, and technological variables.  In cross-cultural leadership, however, there are additional variables that include the relations between the leader and the subordinate as well as group relations as they are affected by cultural values, expectations, attitudes, needs, perception, and loci of control.

The concept of global mind-set has been suggested (Gupta & Govindarajan, 2002), for managers and leaders to successfully integrate across cultures to achieve the objectives of the company in the global market. The major elements of a global mindset are:

1. Intellectual capital-this is the extensive knowledge and ability to learn together with global business and organizational savvy. Global leadership requires intimate knowledge about global opportunities as well as the resources of the company and its ability to capture such markets. Leaders and managers with a global mindset should be able to learn from global (multinational/multicultural) teams, interpersonal operate in interpersonal level and make appropriate business decisions involving different cultures and business models.
2. Social capital– This is the capability to build trust and a good relationship with people different from you. It includes intercultural empathy and diplomacy. A global leader should be able to inspire as well as influence the attitude, the thinking, and the behavior of others around the world. This is important as the interactions of a leader strongly influence the motivation and the ability of the employees and the entire organization to achieve the desired objectives.
3. Psychological capital-This is the capacity and openness to differences and change. The global manager should keep an open mind and be ready to tolerate ambiguity as well as be an effective cross-cultural communicator and a collaborative team player on a worldwide stage. He/she should be able to support and balance local and global objectives and practices effectively.