Colleagues or competitors? : A cross-cultural study about the effects of commission based salaries in Sweden vs. the U.S.

Sammanfattning: An important issue that managers are facing in today’s intensive business environment is how to compensate their employees to keep them motivated. The trend is to be rewarded for the individual performances, which has increased the usage of commission based salary systems. Previous research suggests that commission salary provokes internal competition, while it damages cooperation. However, the main issue in feminine and masculine societies is what motivates people, which indicates that the effects of commission based salary systems needed to be examined from a cultural perspective. Therefore, with the main aim was to enhance the understanding of this, the problem was addressed by the overreaching research question: How do commission based salary systems affect cooperation and internal competition in masculine and in feminine societies? To answer this, empirical data was acquired from Sweden and the United States. Sweden is recognized as the most feminine society, where social motives are dominating. The United States on the other hand, is recognized as a masculine society that encourages competition and where money is the main motivator. The empirical data derived from personal interviews with real estate agents that work with commission salary. Three case companies within each country were included in the study and three interviewees within each company participated. The findings showed that commission salary tends to increase the work effort, limit the cooperation, while it increases the internal competition. Nevertheless, the effects it has distinctively differs between the societies. In Sweden, the importance of group cohesion and interpersonal relationship results in a higher level of cooperation than in the United States. Despite that commission salary evokes internal competition, colleagues are colleagues above all in Sweden. In the United States however, cooperation mainly occurs when it serves the individual performances. Here, money and the own success are what matter the most and due to the competitive mindset, internal competition becomes significantly more intensive in the United States than in Sweden. In contrary to Sweden, commission salary can turn colleagues into competitors, for better or for worse.