The Effects of Employee Recognition, Pay, and Benefits on Job Satisfaction: Cross Country Evidence

Mussie T. Tessema¹, Kathryn J. Ready¹, Abel B. Embaye²
(1. Winona State University, USA; 2. University of Arkansas, USA)

Abstract: This paper analyzes the effect of employee recognition, pay, and benefits on job satisfaction. In this cross-sectional study, survey responses from university students in the U.S. (n = 457), Malaysia (n = 347) and Vietnam (n = 391) were analyzed. Employee recognition, pay, and benefits were found to have a significant impact on job satisfaction, regardless of home country income level (high, middle or low income) and culture (collectivist or individualist). However, the effect of benefits on job satisfaction was significantly more important for U.S. respondents than for respondents from Malaysia and Vietnam. The authors conclude that both financial and nonfinancial rewards have a role in influencing job satisfaction, which ultimately impacts employee performance. Theoretical and practical implications for developing effective recruitment and retention policies for employees are also discussed.

Key words: HR practices; employee recognition; pay; benefits; job satisfaction; culture; Vietnam; Malaysia; USA

JEL code: M12