How does company culture affect the remuneration package?

13 November 2023

Knowing corporate culture, is my contention, we also know which remuneration package is preferred. Culture, after all, is the common understanding of what is fair and what is not. Here, the collective perception of how the wage bill should be distributed.

For instance, job evaluation fits perfectly with a formal organisation (operational services) in which the work is bound by strict rules, just as a bonus policy does. If the work calls for project-based cooperation, pooling of knowledge and respect for everyone's specialism (operational services), the preference is for rewarding added value as well as variable reward for team performance.

If the culture is mainly focused on the individual (professional services), the every-man-for-itself-and-god-for-all mentality predominates, as we tend to see within consultancy, then of course one would also like to reward individual performance see, preferably above market level and complemented by a fixed 13the month. After all, a bonus comes at the expense of creativity.

A very strong entrepreneurial culture (product leadership), in which people operate shoulder to shoulder, ideals are far elevated above individual interest, likes levelised pay relationships with the occasional bonus if the boss thinks a person or team is entitled to a bonus. Profit sharing further underlines that performance is the merit of the collective.

Rolf Baarda

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