Paying Their Way: A Comparison of Managerial Reward Systems in the London and Hong Kong Banking Industries

Abstract

Despite the growing interest in comparative human resource management, comparison of international reward management practices is a neglected area. This article reports on a research project undertaken in 1995 that looked at managerial reward systems within three organizations operating in two different geographical locations. It focuses on three international banks in Hong Kong and London. The aim was to identify the overall strategic reward philosophy of each bank and the form and content of the reward systems for managers in each location. The findings indicate that the shape and substantive content of the reward package was not predetermined by cultural or environmental considerations but that these are important influences on how global pay strategies are interpreted at national level. The marked differences in the banking industry labour markets of the two locations was a major determinant. A significant element of localized decision taking was accompanied by similarities in practice and broad reward philosophy between the two locations and the three institutions.

However, the research suggests that the cultural interpretation put on the forms of payment—particularly perforrnance-related pay— may be different in the two locations. While the same terms may be used for overall descriptions of the content and philosophy of the reward strategy, cultural and environmental factors mean that the reality may be rather different.