Individual-Level Rewards and Appraisal: The Influence of Context

Individual performance rewards and individual performance appraisals are key elements of calculative human resource management (HRM). As practices, they figure strongly in the most highly cited studies within strategic HRM research. However, these studies are generally located within a single, distinct context, the United States, a context in which there is an underlying assumption of firm latitude. Varieties of capitalism literature indicates that this assumption is inappropriate to the context of the coordinated market economies of Europe. This chapter reviews cross-national studies of the adoption of calculative HRM and observes a substantial influence of national context on its adoption by firms. In terms of how to conceive national context, recent research suggests that formal institutional influences are of more salience than informal influences. The relative importance of formal institutional influences has consequences for international management education that predominantly views context through a cultural lens. The chapter further observes that recent research of the uptake of calculative HRM perceives context as a constraint rather than as a determinant. Regardless of context, managers have at least some latitude to implement calculative HRM practices. However, the chapter suggests that their efforts need to be adapted to, and sensitive to, contextual constraints.