Email this article 
.jpg){kind=logo}
_.jpg)
The Interplay of Culture and Compensation: How Financial Rewards Impact Engagement in the Public Sector?
Abstract
Cultural research on the influence of individuality and collectivism on employee engagement is lacking. This study aims to analyse the impact of employee financial rewards on employee engagement, focusing on individualistic and collectivistic cultures as moderating variables in a public sector organisation. This research employed standardised face-to-face open-ended interviews. The research instrument is made from one theme and five open-ended questions to address the objectives of this study. The constantcomparative dataanalysis approach was employed inconjunction with content analysis. The researcher categorised the data based on their disparities and similarities. This study found that the municipality offers its employees financial rewards; however, due to inequality, unfairness, favouritism, and political influence, employees are not rewarded fairly, leading to unhappiness and disengagement from their work and the organisation. The municipality does not practice either a collectivistic or individualistic culture. A poor imbalance between individualistic and collectivistic cultures reduces the impact of financial rewards on employee engagement. This study's findings emphasise that the effectiveness of monetaryrewardsonemployeeengagementdependsontheorganisation's practicesandtheequilibriumofindividualisticandcollectivisticcultures.
Keywords
Full Text:
PDFReferences
Abun, D., Magallanes, T., Foronda, G. S. L., & Encarnacion, M. J. (2020). WP employees’ workplace well-being and work engagement of divine word colleges’ employees in Ilocos region, Philippines. International Journal of Research in Business and Social Science, 9(2), 70–84. https://doi.org/10.20525/ijrbs.v9i2.623
Adams, J. S. (1965). Inequity in social exchange. Advances in Experimental Social Psychology, 2, 267–299.
Adarsh, A. (2020). A study on effect of incentive compensation on employee engagement for Generation Y. International Journal of Multidisciplinary and Current Educational Research, 2(5), 175–193. http://www.ijmcer.com
Aktar, S., Sachu, M. K., & Ali, E. M. (2012). The impact of rewards on employee performance in commercial banks of Bangladesh: An empirical study. IOSR Journal of Business and Management, 6(2), 9–15.
Akuoko, K. O., Kanwetuu, V. D. P., & Dwumah, P. (2014). Effect of reward systems on employees’ behaviour in Obuasi municipality of Ghana. International Journal of Social Science & Interdisciplinary Research, 3(1), 128–142. http://www.indianresearchjournals.com
Ali, A. J., Fuenzalida, J., Gómez, M., & Williams, M. J. (2021). Four lenses on people management in the public sector: An evidence review and synthesis (BSG Working Paper Series No. 2021-040). https://www.bsg.ox.ac.uk/sites/default/files/2021-06/BSG-WP-2021-040.pdf
Allen, M. (2014). Employee engagement – A culture change (Unpublished manuscript).
Armstrong, M. (2012). Armstrong’s handbook of human resource management practice. Kogan Page.
Bersin, J. (2023). Increasing employee engagement: Through strategic recognition. Reward Gateway. https://www.rewardgateway.com/hubfs/resources-research/improving-employee-engagement-through-strategic-recognition-bersin-global.pdf
Bloom, M., & Milkovich, G. T. (1998). A SHRM on international compensation and reward systems (CAHRS Working Paper 98–11). Cornell University, School of Industrial and Labour Relations, Centre for Advanced Human Resource Studies.
Branka, Z. P., & Marija, T. (2021). The influence of the reward system on local government performance: Evidence from the Republic of SRPSKA. *Poslovne Studije/Business Studies, 13*(25–26), 37–48. https://doi.org/10.7251/POS2126037Z
Braun, V., & Clarke, V. (2019). Reflecting on reflexive thematic analysis. Qualitative Research in Sport, Exercise and Health, 11(4), 589–597. https://doi.org/10.1080/2159676X.2019.1628806
Butler, S. S., Brennan-Ing, M., Wardamasky, S., & Ashley, A. (2014). Determinants of longer job tenure among home care aides: What makes some stay on the job while others leave? Journal of Applied Gerontology, 33(2), 164–188. https://doi.org/10.1177/0733464813495958
Chartered Institute of Personnel and Development. (2017). Have your say: Alternative forms of workplace voice (Positioning Paper). https://www.cipd.org/globalassets/media/knowledge/knowledge-hub/reports/voice-positioning-report_tcm18-27507.pdf
Cherry, K. (2022, July 12). What is a collectivist culture? Individualism vs. collectivism. Verywell Mind. https://www.verywellmind.com/what-are-collectivistic-cultures-2794962
Chioma, B. E. (2020). Reward systems and employee engagement of selected deposit money banks in Port Harcourt, Rivers State, Nigeria. International Academic Journal of Management and Marketing, 6(6), 25–33.
Choudhury, S., & Mohanty, M. K. (2018). A conceptual model of employee engagement: From the perspective of manufacturing industry. Research Review International Journal of Multidisciplinary, 3(7), 290–296. http://www.rrjournals.com
Corna, H. M. (2021, May 20). The culture of the future: Collectivism vs. individualism. LinkedIn. https://www.linkedin.com/pulse/culture-future-collectivism-vs-individualism-hilary-m-corna/
Crouch, M., & McKenzie, H. (2006). The logic of small samples in interview-based qualitative research. Social Science Information, 45(4), 483–499. https://doi.org/10.1177/0539018406069584
Cullen, Z., & Perez-Truglia, R. (2021). How much does your boss make? The effects of salary comparisons (SSRN Working Paper 3200136). https://doi.org/10.2139/ssrn.3200136
Deci, E. L., & Ryan, R. M. (2000). The "what" and "why" of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11(4), 227–268.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.
Dow, S. K., Thomas, M., & Mark, R. (2010). The role of rewards in building employee engagement. WorldatWork Journal, 19(4), 29–40.
Flare. (2022). The race for talent: How to support employee financial wellbeing. https://flarebenefits.com/wp-content/uploads/2022/06/Flare-How-to-support-employee-financial-wellbeing.pdf
Gallup. (2023). The benefits of employee engagement. https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx
Gbande, R. (2016). Effects of reward system on productivity in the local government system in Benue State. Journal of Economics and Sustainable Development, 7(22), 202–210. http://www.iiste.org
Gelfand, M. J. (2018). Rule makers, rule breakers: How tight and loose cultures wire our world. Scribner.
Gelfand, M. J., Harrington, J. R., & Jackson, J. C. (2022). The strength of social norms across human groups. Perspectives on Psychological Science, 17(3), 616–637.
Glaser, B. G., & Strauss, A. L. (1967). The discovery of grounded theory: Strategies for qualitative research. Aldine De Gruyter.
Goff-Deakins, C. (2019, January 15). Celebrating individualism in the workplace. HRZone. https://www.hrzone.com/lead/culture/celebrating-individualism-in-the-workplace
Gomez-Mejia, L. R., & Welbourne, T. (1991). Compensation strategies in a global context. Human Resource Planning, 14(1), 29–42.
Gubler, T., Larkin, I., & Pierce, L. (2013). The dirty laundry of employee award programs: Evidence from the field (Harvard Business School Working Knowledge). https://hbswk.hbs.edu/item/the-dirty-laundry-of-employee-award-programs-evidence-from-the-field
Heneman, R. L., & Coye, E. E. (2007). Implementing total reward strategies: A guide to successfully planning and implementing a total reward system. SHRM Foundation.
Herzberg, F. (1954). An analysis of morale survey comments. Personnel Psychology, 7(2), 267–275. https://doi.org/10.1111/j.1744-6570.1954.tb01600.x
Herzberg, F. (2005). Motivation-hygiene theory. In J. B. Miner (Ed.), Organizational behavior 1: Essential theories of motivation and leadership (pp. 61–74). M.E. Sharpe.
Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Sage.
Hoole, C., & Hotz, G. (2016). The impact of a total reward system of work engagement. SA Journal of Industrial Psychology, 42(1), a1317. https://doi.org/10.4102/sajip.v42i1.1317
Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33(4), 692–724. https://doi.org/10.2307/256287
Kiley, J. (2018). Motivating. In J. W. Strydom (Ed.), Principles of business management (4th ed., pp. 136–155). Oxford University Press Southern Africa.
Koskey, A. K., & Sakataka, W. (2015). Effect of reward on employee engagement and commitment at Rift Valley Bottlers Company. International Academic Journal of Human Resource and Business Administration, 1(5), 36–54. http://www.iajournals.org/articles/iajhrba_v1_i5_36_54.pdf
Langat, I. C. (2021). The influence of reward system on employee performance in the public sector: A case of Nairobi metropolitan services [Master’s research project, Kenyatta University].
Langhneja, M. (2023, September 7). Unveiling employee dissatisfaction: Understanding the reasons and solutions. LinkedIn. https://www.linkedin.com/pulse/unveiling-employee-dissatisfaction-understanding-mayuri-langhneja/
Lee, H., Choi, Y., & Park, S. (2023). Collectivism, reward for teamwork, and employee engagement: A moderated mediation model. International Journal of Human Resource Management, 34(5), 1020–1045.
LeFebvre, R., & Franke, V. (2013). Culture matters: Individualism vs. collectivism in conflict decision-making. Societies, 3(1), 128–146. https://doi.org/10.3390/soc3010128
Luthans, F., Marsnik, P. A., & Luthans, K. W. (1997). A contingency matrix approach to IHRM. Human Resource Management, 36(2), 183–199. https://doi.org/10.1002/(SICI)1099-050X(199722)36:2<183::AID-HRM2>3.0.CO;2-T
Madhani, P. M. (2020). Effective rewards and recognition strategy: Enhancing employee engagement, customer retention and firm performance. The Journal of Total Rewards, 29(2), 39–48. https://ssrn.com/abstract=3672972
Madumo, O. S. (2023a). Political influence in local government administration and service delivery in South Africa. Administratio Publica, 31(1), 123–145.
Madumo, O. S. (2023b). Collective decision-making: A critical function towards ensuring sustainable development in local government. African Renaissance, 20(4), 313–335. https://hdl.handle.net/10520/ejc-aa_afren_v20_n4_a19
Mafini, C., & Dlodlo, N. (2024). The relationship between perceived organizational injustice and work disengagement in South African public sector institutions. SA Journal of Human Resource Management, 22, a2156.
Mdhlalose, D. (2024). An examination of employee rewards and work environment on employee creativity and innovation. SEISENSE Journal of Management, 7(1), 21–34. https://doi.org/10.33215/rewfe541
Mexon, J., & Kumar, A. A. (2020). Business research methods. Skyfox Publishing Group.
Moon, C., Travaglino, G. A., & Uskul, A. K. (2018). Social value orientation and endorsement of horizontal and vertical individualism and collectivism: An exploratory study comparing individuals from North America and South Korea. Frontiers in Psychology, 9, 2262. https://doi.org/10.3389/fpsyg.2018.02262
Morris, M. H., Avila, R. A., & Allen, J. (1993). Individualism and the modern corporation: Implications for innovation and entrepreneurship. Journal of Management, 19(3), 595–612. https://doi.org/10.1177/014920639301900306
Morse, J. M., & Field, P. A. (1998). Nursing research of qualitative approaches. Stanley Thornes.
Mueller, B. (2019). Why public policies fail: Policymaking under complexity. EconomiA, 21(2), 311–323. https://doi.org/10.1016/j.econ.2019.11.002
Neely, S. (2023, January 10). Individualism in the workplace. The Nest. https://woman.thenest.com/individualism-workplace-20387.html
Nel, P. S., Kirsten, M., Erasmus, B. J., Gobind, J., Holtzhausen, M., & Jordaan, B. (2020). South African employment relations: Theory and practice (9th ed.). Van Schaik.
Neranto, F. Y. (2022). Total reward and employee engagement in the Education Department in Narok County, Kenya [Master’s dissertation, Kenyatta University].
Ngulube, N., & Mtshali, N. G. (2023). Equity, fairness and the erosion of public service motivation: A case of municipal workers in KwaZulu-Natal. African Journal of Governance and Development, 12(1), 225–243.
Noordin, F. (2004). Individualism-collectivism: A comparative study of Malaysian and Australian managers. Gading Business and Management Journal, 8(1), 55–82.
Omaru, G. (2021, November 15). Are rewards for high performance in the public sector sufficient for continual employee motivation? LinkedIn. https://www.linkedin.com/pulse/rewards-high-performance-public-sector-sufficient-gabriel/
Piek, J. J. (1997). Implications of individualistic and collectivistic orientations for management development [Master’s thesis, University of South Africa]. https://uir.unisa.ac.za/handle/10500/15772
PricewaterhouseCoopers. (2010). Remuneration trends report – Southern Africa. https://www.pwc.co.za/en/assets/pdf/remuneration_trends_report.pdf
Quartz Enterprises. (2023, April 14). Employee engagement and company culture: How to create a winning workplace. LinkedIn. https://www.linkedin.com/pulse/employee-engagement-company-culture-how-create-winning/
Raath, C., & Phillips, M. (2023). Evolving remuneration and reward trends in South Africa. 21st Century. https://www.21century.co.za/evolving-remuneration-and-rewardtrends/
Rickard, C., Reilly, P., & Brown, D. (2016). Applying a reward strategy in local government. Institute for Employment Studies.
Ritz, A., Brewer, G. A., & Neumann, O. (2020). Public service motivation: A systematic literature review and outlook. Public Administration Review, 80(2), 259–272.
Roberts, G. E. (2004). Municipal government benefits practices and personnel outcomes: Results from a national survey. Public Personnel Management, 33(1), 1–22. https://doi.org/10.1177/009102600403300101
Samantha. (2023, March 22). The role of collectivism and individualism in shaping workplace culture. JustLogin. https://justlogin.com/blog/the-role-of-collectivism-and-individualism-in-shaping-workplace-culture/
Seid, H. (2019). The effect of total rewards on employee engagement: The moderating role of perceived reward fairness [Master’s thesis, Addis Ababa University].
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill-building approach (7th ed.). John Wiley & Sons.
Shavitt, S., & Cho, H. (2016). Culture and consumer behaviour: The role of horizontal and vertical cultural factors. Current Opinion in Psychology, 8, 149–154. https://doi.org/10.1016/j.copsyc.2015.11.002
Sibiya, M. (2023). Favouritism, bias and low employee engagement in South African municipalities. Journal of Local Government Research and Innovation, 4, a79.
Sibiya, V. I. (2023). Integrative leadership approaches and their influence on employee engagement: A case for uMkhanyakude district municipality [Doctoral thesis, Durban University of Technology].
Singh, P., Sreehitha, L., Kumar, V., Rajak, B. K., & Sarkar, S. (2024). Profiling employee engagement dimensions and outcomes: A person-centred approach. International Journal of Productivity and Performance Management. Advance online publication. https://doi.org/10.1108/IJPPM-08-2023-0426
Sixpence, S., De Braine, R., Bussin, M., & Mthombeni, M. (2021). Anchoring human resource management to sustain employee performance at Johannesburg Metropolitan Municipality. SA Journal of Human Resource Management, 19, a1611. https://doi.org/10.4102/sajhrm.v19i0.1611
South African Local Government Association. (2012). Learning framework for local government. https://www.salga.org.za/Documents/Knowledge%20Hub/Learning%20Framework%20for%20Local%20Government/Learning-Qual-Framework-for-Local-Government.pdf
Stoeckmann, J. (2010, December 1). Facts and fallacies of total rewards in the public sector. PA Times. https://patimes.org/facts-and-fallacies-of-total-rewards-in-the-public-sector/
Swanepoel, B., Erasmus, B., Schenk, H., & Tshilongamulenzhe, M. C. (2014). South African human resource management: Theory and practice (5th ed.). Juta and Company.
Triguero-Sánchez, R., Peña-Vinces, J., & Ferreira, J. J. (2022). The effect of collectivism-based organisational culture on employee commitment in public organisations. *Socio-Economic Planning Sciences, 83*, 101335. https://doi.org/10.1016/j.seps.2022.101335
Tsede, O. A., & Kutin, E. (2013). Total reward concept: A key motivational tool for corporate Ghana. Business and Economic Research, 3(2), 173–182.
Werner, A. (2017). Motivation. In P. Nel & A. Werner (Eds.), Human resource management (10th ed., pp. 333–358). Oxford University Press.
Werner, A. (2020). Motivation and engagement. In P. Nel & A. Werner (Eds.), Human resource management (11th ed., pp. 403–429). Oxford University Press.
Winkler, R. (2008). Communication management in culturally diverse organisations. Oficyna a Walters Kluwer Business.
WorldatWork. (2011). Rewards fairness: Perceptions of fairness in compensation and benefits (Survey Report). https://worldatwork.org/media/CDN/dist/CDN2/documents/pdf/resources/research/Reward-Fairness-2011.pdf
DOI: http://dx.doi.org/10.22441/jimb.v12i1.37188
Refbacks
- There are currently no refbacks.
Copyright (c) 2026 Jurnal Ilmiah Manajemen dan Bisnis
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Jurnal Ilmiah Manajemen dan Bisnis
Fakultas Ekonomi dan Bisnis Universitas Mercu Buana
Jl. Raya Meruya Selatan, Kembangan, Jakarta 11650
Tlp./Fax: +62215871335
ISSN: 2460-8424
E-ISSN: 2655-7274
http://publikasi.mercubuana.ac.id/index.php/jimb
This journal is indexed by:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.