Incentives in the Asian context: Theory and preliminary evidence

Abstract

Incentive design for productivity gains has become important for Asian organizations in recent years. This paper introduces the theory of incentive design to an Asian audience while extending the agency theoretic approach to control. Hypotheses derived from this theory were tested in 61 retail stores in Singapore. The results show that employee skills, output measurability and task uncertainty significantly impact incentive design. The results indicate that agency theory may be applicable across cultures. Implications for the Asian context, and its adaptation in terms of behavior, are discussed. © 1999 bY John Wiley & Sons (Asia) Ltd.