How can organisations motivate a global workforce comprised of people from diverse cultures to achieve high performance? It’s a dilemma that every multinational with employees from more than one culture faces – and in the age of globalisation, that’s just about everyone.
The good news is that a single HR tool can motivate all employees regardless of their cultural background.
“The most powerful tool for motivation is compensation and benefits,” said Professor Noorein Inamdar, associate professor of practice in management at City University of Hong Kong Business School.
The bad news is that no one size fits all when it comes to making C&B work across cultures, she told the Classified Post HR Conference this week. Inamdar defines culture as “deeply rooted patterns of values, customs, attitudes and beliefs that distinguish one group from another.” Many organisations do not appreciate the deep differences that exist between cultures, she said, and this oversight can cost employers dearly.
As many as 70 per cent of international ventures fail purely because of cultural reasons and 90 per cent of executives in 68 different countries say cross-cultural management is their biggest challenge, said Inamdar.
The culprit is a lack of cultural intelligence in how organisations are treating their diverse employees. Cultural intelligence, according to Inamdar, is the ability to cross the borders between cultures, to interact and communicate effectively with many different types of people, and understand and leverage these differences for organisational success.
Employers need to be more culturally intelligent when developing C&B, to motivate across cultures, said Inamdar.
Often, HR simply takes the C&B practices that are used in one part of the organisation and deploys them across different cultures. Instead, HR professions need to design C&B packages that are in tune with the values of each culture.
When employers get this right, the advantages can be dizzying. According to a Gallup survey cited by Inamdar, organizations can see their profits rise by 40 per cent, their customer loyalty grow by 70 per cent and employee turnover fall by 70 per cent.
To find out more about how cultures differ from each other, Inamdar recommended using the well-respected Hofstede dimensions. These are based on the work of Professor Geert Hofstede, who defined six key dimensions for understanding a culture by studying its values.
To boost motivation, Inamdar suggested using the Hofstede indices to better understand the different cultures an organisation is dealing with, and then designing or adapting C&B packages to find the combination that best responds to the characteristics of each culture.
For example, one of the six dimensions Hofstede defined measures individualism versus collectivism. Employees in cultures that score high on individualism – which includes the US and Australia, for example – would likely respond better to a C&B package that rewards individual contributions. By contrast, employees working in a culture that is more collectivistic will probably prefer to have pay that is team-based and disregards individual contributions.
Championing better work and working lives
About the CIPD
At the CIPD, we champion better work and working lives. We help organisations to thrive by focusing on their people, supporting economies and society for the future. We lead debate as the voice for everyone wanting a better world of work.