Country of origin and competitive advantage: managing performance through performance related pay in Australian subsidiaries

Abstract

This paper examines reward management through Performance Related Pay (PRP) incentive schemes and their perceived benefits on organizational performance and employee motivation. Utilizing data from the Australian Workplace Industrial Relations Survey (AWIRS), the study compares PRP practices between local Australian firms and multinational company (MNC) subsidiaries. It explores the ongoing debate regarding the transferability of Human Resource Management (HRM) practices across borders. The findings indicate distinct country of origin differences in how PRP is applied. While MNCs tend to transfer preferred reward systems to their subsidiaries for competitive advantage, the study suggests that direct replication may not always be appropriate due to local context.