Strategic Information Technology Compensation: A Cross-Cultural Perspective

Chingning Wang

Source Title: Journal of Global Information Management (JGIM)27(4)

ISSN: 1062-7375|EISSN: 1533-7995|EISBN13: 9781522563730|DOI: 10.4018/JGIM.2019100102

MLA

Wang, Chingning. "Strategic Information Technology Compensation: A Cross-Cultural Perspective." JGIM vol.27, no.4 2019: pp.16-45. http://doi.org/10.4018/JGIM.2019100102

APA

Wang, C. (2019). Strategic Information Technology Compensation: A Cross-Cultural Perspective. Journal of Global Information Management (JGIM), 27(4), 16-45. http://doi.org/10.4018/JGIM.2019100102

Chicago

Wang, Chingning. "Strategic Information Technology Compensation: A Cross-Cultural Perspective," Journal of Global Information Management (JGIM) 27, no.4: 16-45. http://doi.org/10.4018/JGIM.2019100102

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Abstract

The 2008 financial crisis has made many high-tech firms vulnerable. Some non-American firms (e.g. in Taiwan) have even granted their IT professionals a “no-pay break” to reduce firms' financial uncertainty. The crisis leads to a need to re-examine managerial compensation thinking from a cross-cultural perspective. Drawing on cross-cultural case studies in Taiwan, a collectivist culture, and in the United States, an individualist culture, this research explores managerial thinking on how to align strategic IT compensation with personnel's immigrant status and IT sourcing strategies in different industrial and national/cultural contexts. It also explores how firms utilize nonmonetary compensation in different cultures. Compensation for IT professionals in Taiwan are reportedly to be more uniform because of the feature of collectivist culture. Compensation for IT professionals in the United States are reportedly more fluid thanks to a frontier culture and individualism. Therefore, negotiable competitive pay is emphasized. Both Taiwan and the US have suffered from wage stagnation for decades. In Taiwan, this stagnation may be related to a depreciation of higher degrees since the number of university graduates has been increased fivefold in two decades and IT related degrees have been amidst popular majors which lead to oversupply in IT workforce. In the US, this stagnation may be related to economic recession and reduced IT investment/full-time positions, dropping IT enrollment, IT skill/education-job mismatch, and increased reliance on IT contractors in an emerging IT gig economy. From a cultural perspective, “still under employment” in a Confucian society which emphasizes face-saving that has value in its own right and it explains why some firms in Taiwan granted IT professionals a “no-pay break” instead of immediate layoff to cope with the 2008 crisis. Meanwhile, to cope with the challenge of IT skill/education-job mismatch in the United States, using a domestic training program as nonmonetary compensation may be a viable alternative to IT firms whose IT compensation strategies emphasize lucrative pay or poach IT talents rather than nurturing IT talents. Theoretically, economic/organization theories derived from western experiences or ideologies in 1900s, where industrialization, private/hierarchical organizations, and higher education were booming, may not fit non-western countries' experiences or today's world where the trends of outsourcing, IT contracting, gig economy and depreciation of education are emerging.