Pay or Play: Austria and Germany Versus America. Examining Differences In Employment Benefit Preferences and Their Effects on Employees

Differences between cultures have been (and continue to be) examined by researchers all over the world. Prominent studies performed by organizations such as GLOBE and Hofstede have created a foundation for our understanding of how culture affects business in different countries. They also inspired our study, which investigates how employment benefits vary in different cultures. We examined the difference in employee benefit preference of Austria and Germany compared to America and how that affects their perception of the organization. Specifically, we studied how employees in those countries would react to an increase in wage or an increase in vacation time. Each participant read a hypothetical scenario in which they received one of the two benefits. The alternative benefit was not disclosed to them. After reading about the reward, they were asked various questions about the company. These questions gauged their belief in the ability of the organization, their benevolence toward the organization, their perception of the integrity of the organization, their trust in the organization, their turnover intentions, and their obligation felt towards the organization.
Two of the six variables tested yielded statistically significant results after we performed a univariate analysis of variance test on each of the variables. The two variables that yielded statistically significant results were belief in the integrity of the organization and benevolence toward the organization. Americans expressed more benevolence and belief in the integrity of their organization when they received more vacation time, while Europeans exhibited the opposite reaction (to a lesser degree). These results could provide insight to companies that are looking to strengthen company culture or increase motivation of employees. The variables with non-significant results could be attributed to globalization, limitations of our study, or the concept of scarcity.