Title: Transfer or localize? International reward and compensation practices of South Korean multinational enterprises in China
Abstract: AbstractInternational reward and compensation has received little academic attention, but past research was mainly conducted in advanced Western economies. This study explores the extent to which multinational enterprises (MNEs) from an emerging economy, South Korea, transfer reward and compensation practices from business headquarters to a transitional economy, China and the determining factors for transfer. Using a qualitative approach to analysing 10 South Korean MNEs in China, this study reveals that the sample companies adopt home-oriented focal reward and compensation policies and practices (including base pay and performance-based pay) and an integrative approach to peripheral components (including allowances and benefits) for expatriates. However, the companies adopt an integrative approach to focal components of reward and compensation and a localized approach to peripheral components for host country nationals (HCNs). These findings indicate that Korean MNEs adopt different approaches to reward and compensation for expatriates and HCNs, as well as to focal and peripheral components of reward and compensation practices. The transfer of reward and compensation is due to the dominance effect resulting from the fact that the home economy is relatively more advanced than the host economy. On the one hand, the tendency to localize reward and compensation results from contextual differences between host and home nations, such as economic development, living costs and compensation traditions.Keywords:: Chinainternational reward and compensationlocalizationSouth Korean multinational enterprisetransfer Additional informationNotes on contributorsHaiying KangDr Haiying Kang, the School of Management, Centre for HRM, Division of Business, University of South Australia. Her research interest is in international human resource management in South Korean multinationals. She has published in journals, such as International Journal of HRM, Thunderbird Business Review and Asia Pacific Business Review.Jie ShenDr Jie Shen, the School of Management, Centre for HRM, University of South Australia. Dr Shen's research interests include human resource management, international HRM, and Organizational Behaviour. He has published in journals, such as Journal of Management, Human Resource Management, International Journal of HRM, and so on.
Publication Year: 2014
Publication Date: 2014-07-28
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 8
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