Grant of ESOPs and Culture: A Study in Indian Context

Abstract

In a growing organization, the management not only wants to retain its entire working team but also desires that the members be suitably compensated for their efforts. The compensation policy of any organization impacts employees’ enthusiasm, contentment and performance. ESOPs have emerged as an important non-cash tool to compensate employees. The compensation policy is in turn influenced by cultural aspects. The term culture is not equivalent to the term country. To avoid stereotyping, the cultural values should be captured at an individual level. For this purpose, cultural dimensions have been measured through CVSCALE which has been adapted and modified according to Indian scenario. The core objective of this paper is to explore cultural dimensions which influence the grant of ESOPs in India. To meet the objective of the study, primary data has been collected from 500 employees. Exploratory factor analysis (EFA) and Confirmatory factor analysis (CFA) has been applied in the study. The results highlight that there are four distinct cultural dimensions which influences the grant of ESOPs in India namely, as power distance, uncertainty avoidance, individualism-collectivism and masculinity-femininity.

Keywords: ESOPs; Culture; Exploratory factor analysis (EFA); Confirmatory factor analysis (CFA)