A Policy-Capturing Approach to the Study of United States and Japanese Managers' Compensation Decisions

Abstract

Although there is much interest in the implementation of Japanese management techniques in the United States, it is not clear which aspects can be successfully adopted here. The present study examined the compensation decision-making policies of 41 Japanese and 63 United States managers. The results confi rmed past research regarding the importance that U.S. managers place upon job performance in their pay decisions and the importance that Japanese managers place upon other factors beyond performance (e.g., job worth) in their decisions. In addition, both groups gave the same amount of pay increase on the average; however, U.S. managers were much more willing to give large or small increases, whereas the Japanese managers had little variance in pay increases from employee to employee. Implications for managerial policy and practices of Japanese managers operating in the United States are discussed.