An employee’s cultural background is sometimes a more accurate, consistent predictor of his or her job performance and organizational loyalty than personality tests routinely used by employers. So says a new study—the largest of its kind—that examines how cultural values affect job performance.

Bradley Kirkman

Brad Kirkman, John E. Pearson Associate Professor of Management, and co-authors pulled together data from nearly 600 previous studies that analyzed the effects of cultural values on job outcomes linked to 200,000 individuals. The research examined 80 areas of organizational life such as non-verbal communication, perceptions of justice, and employee rewards and how they’re affected by cultural values.

Cultural diversity poses particular challenges to a company, but the challenges can be minimized and the monetary rewards for corporations maximized when they balance these values correctly, say researchers.

The findings have huge implications for corporations with high multicultural diversity. Perceptions of justice and rewards are among the most important, the authors say. In cultures that value personal achievement (the U.S., for example), rewards for individuals can motivate a team to work harder and compete for rewards. However, that approach can clash with cultural values such as respect for seniority and egalitarianism.

The researchers cite an example of an American corporation working in China, which gave leather jackets to two management team members as reward for an innovative idea. The resulting discontent among the rest of the team caused weeks of lost productivity and resulted in the company buying leather jackets for the rest of the team members. The individual reward model didn’t translate well among the Chinese.

Similarly, General Motors found self-directed assembly line teams that worked well in the United States failed in Mexico, where workers don’t typically seek personal empowerment or self-management.

As the corporate world flattens, organizations must find ways to identify cultural values and tailor management practices accordingly in everything from human resources to strategic planning to minimize conflict, the authors say.

Cultural predictors are most accurate for managers who are male, older and are more educated. Countries that are culturally “tight,” such as Japan, where conformity to social norms is expected, see more consistent value-outcome relationships, the authors found. Outcomes for culturally “loose” countries, like the U.S., are less predictable, because there are many accepted norms.

The comprehensive nature of the new research—which the Journal of Applied Psychology has designated a “monograph paper,” indicating a game-changing shift in management theory—allows organizations to plug in different variables and determine which approach will work best in a given culture or multicultural organization.

Progressive organizations have been attempting this for years, says Kirkman. ExxonMobil, for example, uses software that plots the cultural value scores of management surveys and tries to calculate potential gaps in individual performance or conflicts among team members.

Cultural values are so strong, that even after decades of apparent acculturation, employees still behave predictably according to their inherent cultural values. “Even when they talk the talk, wear the clothes and have been in the culture for 25 years, their fundamental values still haven’t changed,” says co-author Vas Taras.

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The article “Examining the Impact of Culture’s Consequences: A Three-Decade, Multilevel, Meta-Analytic Review of Hofstede’s Cultural Value Dimensions” appeared in Journal of Applied Psychology in May 2010.