Lost in Translation: Cultural Interpretations of Performance Pay

No pay system should be put into practice unless it is congruent with the values of the people it will affect. Cross-cultural research suggests performance pay is a poor fit for some cultures, although its actual use is rising throughout these very same cultures. This seeming contradiction is investigated through an exploratory, qualitative analysis to understand how performance pay translates across cultures. Findings call for (a) appropriate level of cultural aggregation, (b) focus on pay equity construal rather than preference and (c) attention to specific dimensions of culture identified as potentially most predictive of equity construal.