Individual-level rewards and appraisal: the influence of context

Individual performance rewards and individual performance appraisals are key elements of “calculative 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 USA, 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 coordinated market economies of Europe. We review cross-national studies of the adoption of calculative HRM and observe a substantial influence of national context on its adoption by firms. In terms of how to conceive national context, we observe that 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. We further observe 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, we suggest that their efforts need to be adapted to and sensitive to contextual constraints.

This is a draft of a chapter that has been accepted for publication by Oxford University Press in the book The Oxford Handbook of Contextual Human Resource Management edited by Emma Parry, Michael J. Morley, and Chris Brewster due for publication in 2021