Reward Systems in the Construction Industry: A Differentiation Between the United States, The United Kingdom and China. Submitted in part requirement for obtaining the degree of Master of Science in Civil Engineering and Management.

1. Reward Systems in the Construction Industry:
A Differentiation Between the United States, The
United Kingdom and China
September 2020
Dissertation submitted in part requirement for obtaining the
degree of Master of Science in Civil Engineering and Management
Mohamad Anas El Mir
2490131
Supervisor: Neil Dodson
Word Count: 12,783

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Acknowledgement
First and foremost, praises and thanks to God, the Almighty, for His showers of blessings
throughout my research work to complete the research successfully. I would like to thank
him for giving me the strength to complete this step despite an unusual period the world is
witnessing and the hard situation we are facing in my home country, Lebanon.
Second, I would like to express my sincere appreciation, respect, and gratitude to my
dissertation supervisor, Dr. Neil Dodson, for providing invaluable advice, endless support
and continuous guidance at all times. I appreciate him for helping me do this work on my
own while keeping track of my steps. His suggestions pushed me to bring my work to a
higher level. I believe that his advice, notes, and support will carry me a long way in my
career. I would also like to thank Dr. Paul Hunter for introducing me to the topic during my
first semester at the University of Glasgow. It is because of his unique way of explaining that
I got interested in this topic and wanted to do more research about it. Besides, I would like
to send my warm thanks to the University of Glasgow, especially the Adam Smith Business
School for supporting me endlessly during this hard period, it has been an honour to be a
student at such a university.
Finally, I would like to thank my family, friends and colleagues for being always there for me.
Their support helped me overcome all the obstacles I had faced on a personal level amid the
overwhelming crisis. I am so grateful to have such great support. Thank you!

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Abstract
Differences in history, culture, economy, management and political systems may lead to
differences in employee job attribute preferences across countries. To the extent that this is
true, managers and employers should understand the preferences of local employees,
especially in the construction industry that forms the backbone of many countries economy.
This study provides information about reward systems adopted by the construction industry
in three different countries namely the United States, the United Kingdom and the Republic
of China. The differences in rewards perception in these countries stem from the difference
in workers’ mentality and work conditions in addition to the factors mentioned above. While
different reward strategies have been displayed in this study, financial payment were still the
fixed components that can never be substituted. Money prizes have been demonstrated as
the most important for an incentive scheme to succeed, beside other kinds of rewards that
take place in parallel in order to get best employees’ performances. From seniority-basis to
performance-basis and profit-sharing systems, the latter has shown more job satisfaction
since they bring a sort of intrinsic motivation and lead employees to feel more valued.
Key Words: Reward Management, Reward Types, Incentive Schemes, Employees Motivation,
Factors Impacting Reward Systems, Job Satisfaction, Employees in the US, UK and Chinese
Construction Industry.

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Table of Contents
Acknowledgement ..................................................................................................................................i
Abstract .................................................................................................................................................. ii
1 Introduction....................................................................................................................................1
2 Literature Review...........................................................................................................................3
2.1 Reward types..........................................................................................................................3
2.1.1 Financial rewards ...........................................................................................................3
2.1.2 Non-Financial Rewards...................................................................................................5
2.1.3 Bonuses and Perks..........................................................................................................6
2.2 Rewards Combination............................................................................................................8
2.2.1 Extrinsic and Intrinsic Rewards......................................................................................8
2.2.2 Total Reward ..................................................................................................................9
3 Methodology ................................................................................................................................12
3.1 Approach to Research Question..........................................................................................12
3.2 Research Methods................................................................................................................12
3.3 Data Collection and Analysis................................................................................................13
3.4 Difficulties and Limitations ..................................................................................................14
4 Findings.........................................................................................................................................15
4.1 The United States Construction Industry ............................................................................15
4.1.1 Why The United States?...............................................................................................15
4.1.2 Reward systems............................................................................................................15
4.1.3 Discussion .....................................................................................................................16
4.1.4 SWOT Analysis..............................................................................................................17
4.1.5 PESTEL Analysis.............................................................................................................19
4.2 The United Kingdom Construction Industry........................................................................21
4.2.1 Why The United Kingdom? ..........................................................................................21
4.2.2 Reward systems............................................................................................................21
4.2.3 Discussion .....................................................................................................................23

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4.2.4 SWOT Analysis..............................................................................................................24
4.2.5 PESTEL Analysis.............................................................................................................26
4.3 The Chinese Construction Industry......................................................................................28
4.3.1 Why China?...................................................................................................................28
4.3.2 Reward Systems ...........................................................................................................28
4.3.3 Discussion .....................................................................................................................30
4.3.4 SWOT Analysis..............................................................................................................30
4.3.5 PESTEL Analysis.............................................................................................................33
5 General Discussion and Conclusion .............................................................................................35
6 References....................................................................................................................................37

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1 Introduction
The term ’reward strategy’ is defined in many ways. Armstrong and Dawson (1996) refer to
reward strategy as the way to influence workers’ behaviour to serve the purpose of the
organisation. Similarly, Wilton (2019) defines it as the system concerning the motivation and
engagement of employees to express desired behaviours, in addition to retain workers with
the required skills to reach the firm’s aims. Lupton (1972) focuses on cost and identifies the
reward system as a method that encourages employees to be flexible at work as well as
serving organisational aims at the minimum cost. A reward strategy is defined as the system
that motivates and retains employees in order to reach organisational goals at the least cost
possible.
The resource-based view approach consists obviously of the idea that the main goals of a
reward strategy are aiming towards fulfilling organisational objectives and controlling
employees’ behaviours by what is called ‘’buying employee compliance’’ (Wilton, 2019,
p.244). Whereas Nisar (2003) agrees that the key business objectives relating to producing
rewards arrangements is to affect the larger market by creating a good reputation among
employees and customers. An effective reward system is a declaration of intent, which
expresses what the organisation wants to do in a long term to develop and implement reward
policies and practices; that will forward the achievements of its business objectives; and meet
the requirements of stakeholders (Armstrong and Stephens, 2005). Due to the major impact
of the reward management system on organisations in catching, retaining and motivating
employees (Barber and Bretz, 2000), managing rewards are one of the most significant
practices of the Human Resource Management System (HRMS) (Güngör, 2011). Therefore,
bonus and motivational schemes are still one of the most under-researched fields in human
resource management.
As a definition, according to Armstrong and Stephens (2005), reward management is the
understanding of organisational employees’ needs, how to be satisfied and how to be
rewarded. Thereafter, in a more detailed study in 2008, Armstrong and Murlis report that
reward management is the formulation of strategies that aim to reward people fairly,
equitably and consistently according to their value to the organisation. Likewise, Thibaut
Landry et al (2017) strengthen this idea by explaining that incentives when distributed fairly,
can strengthen employee’s autonomy and motivation in seeking to enhance their

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performance. Employees cannot be given the same reward regardless of their value, position,
and performance, because this unfairness creates negative impacts such as envy between
employees, also triggers a bad reputation for the company in the market (Heimann et al.,
2013). However, rewards may be divided into many sections: namely financial, non-financial,
also benefits and perks, and the total reward which is the combination of all these mentioned,
Azasu (2009).
Accordingly, this study will point out the difference between these types to show the best
way labour can be motivated, especially in the engineering and construction sectors.
Thereafter, it will demonstrate the reward systems adopted by construction companies in
three different parts of the world, namely the United States, the United Kingdom and China.
The aim of this differentiation is to show employees’ perspective toward each type of reward
offered in each of these three countries.
Later on, this research is starting by stating different points of previous researches by
comparing and contrasting several authors’ opinions of effective reward systems. They will
be criticised in a neutral discussion before moving to state my own beliefs and insights based
on the aforementioned findings. Finally, the conclusion will show the benefits I have got from
this treatise with opening the door in front of a new research that can be done upon mine.

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2 Literature Review
2.1 Reward types
2.1.1 Financial rewards
Reward management strategy may be divided into several types, firstly financial or monetary
rewards which consist of pay bonuses and variable pay (extrinsic) according to individual or
group performance which is called Performance Related Pay (PRP) (Wilton, 2019). In
contemporary society, performance-based incentive, especially monetary reward systems,
are applied broadly to motivate students and employees in schools and manufactories,
respectively. In the professional work field, the principal concept of such rewards is that
employees are going to work harder, with returns for more financial profit, besides, this type
is an important mechanism to recruit and retain talents (Reilly and the Institute for
Employment Studies, 2005). On the other hand, the promises of rewards as money might be
a powerful tool to get the best out of employees, specifically when the to-be-performed task
is repetitive, boring and not intrinsically interesting (Zedelius, C.M. et al, 2012). For instance,
the success of the Chinese economy in the early 1990s has been linked to its greater use of
performance-related pay that encourages workers to co-operate, and subsequently
generates benefits for the whole organisation (Brown, M. and Heywood, J.S., 2002). As well
this type has been used by Congress in two large United States federal agencies, the
Department of Homeland Security and the Department of Defence (Perry and Engbers, 2009).
PRP systems can be divided into individual and group assessment, the individual one can
cause a decrease of co-operation among employees (Dowling and Richardson, 1997; French
et al., 2000). In the same way, Armstrong and Dawson (1996) assume the effect of this system
on the level of co-operation between workers and managers in spite of encouraging the
greatest effort on the part of the worker. A notable example is given about the negative
impact that appeared on employees’ behaviour and commitment after implementing
individual PRPs in Chinese organisations (Du and Choi, 2010). Also, an important point that
can be added here regarding the employees’ expectation of rewards. Deci et al (1999) give an
example of a student getting a grade of B on an exam or a worker’s receipt of 75% of the
maximum possible reward. In this case, the reward may be satisfying but may also be very
demotivating depending on what they believe they deserve. However, people understand

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they can improve their outcomes when rewards are based on an achievable performance
standard.
Concerning group PRPs, it is argued by Aiello (2015) that group working is helpful in
collaborating and sharing knowledge between the workforce, that is to say that employees
will definitely learn from others who have a high level of knowledge and experience. What is
more is the creation of competition between groups of employees in order to get higher
payments. It is explained that sometimes members of the team may lean on others to make
the effort and to raise the team performance (McNabb and Whitfield, 2007). In this situation,
rewards will absolutely be distributed inequitably and the feeling of being unfairly rewarded
plays a critical role in forming employees’ behaviour and outlook (Shields, 2015).
Despite all the benefits presented by the PRP system, researchers have mentioned significant
problems in controlling it. Reilly (2005) explains that this kind of rewards discourages risk-
taking and decreases the creativity of employees, in other words, people go to play safe to
assure receiving rewards ‘‘do this and you will get that’’ makes people focus on the ‘’that’’
rather than the ‘‘this’’ (Reilly, 2005, p.28). While regarding the firm’s perspective, this system
could be a huge problem when firms face economic difficulties and conditions (Hay Group,
2010), when it becomes unable to pay some bonuses the employees used to take. For that
reason, organisation must be dynamic not static therefore a good reward system is one which
is flexible, adaptable to different situation and can take into consideration all changes in
market rate (Armstrong and Dawson, 1996).
Another type of PRP clarified by Wilton (2019) focusing on the organisational performance
called ‘organisation-wide pay scheme’. It is a form of PRP including profit-sharing and gain-
sharing, consists of paying bonuses for workers when the organisation achieves more than its
target. This scheme, as Leadbeater (1997) explains, augments the loyalty to the firm so
workers become more committed, that leads to fewer employees’ turnover and absenteeism.
This statement was agreed by Greene (2014), but he added that this process also drives to
promote the organisation long-term perspectives. Conversely, if these rewards are tied to
short-term goals, organisation will face a problem that workers may not dedicate energy and
time to the longer-term ones (Wilton, 2019). On the other hand, Reilly and the Institute for
Employment Studies (2005) define this process as sharing in success, and says that this
process affects negatively the quality of products or services by giving a brief example

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concerning Royal Mail; They tended to set an extra amount between £800 and £1000 if the
profits exceeded £400 million at the end of 2005, despite the target having been reached, the
quality of service had been missed.
2.1.2 Non-Financial Rewards
Prior to the 1950s, all motivation theories were focusing on psychological causes such as sex,
thirst, and hunger assuming that all behaviours are motivated through these drives (Freud,
1962; Hull, 1943). The general concept of this type of motivation is clarified by White (1959)
as a proposition that always people try to engage in activities to simply get experience and
show their competences. Despite their vital importance, traditional companies have not been
using these kinds of rewards as financial elements were paramount, and the easiest and
simplest way to reward people is through pay or remuneration. For that reason, several
organisations are trying to find new ways to differentiate themselves from their market
competitors by renewing the elements of non-financial rewards often through training and
development (WorldatWork, 2003). They are trying to control their employees’ behaviours as
well as attracting the best talents in a way where the money is not the most important factor.
Here, the second type of reward takes place: The Intrinsic Reward. It is defined by Wilton
(2019) as psychological which covers non-financial or non-monetary rewards such as feeling
valued by the organisation; receiving praise; job satisfaction; power promotion and
professional development. Similarly, Armstrong (2007) sees that reward management is not
only about paying employees, but it is also equivalently concerned with non-financial rewards
such as recognition, learning, opportunities for growth and increased job responsibilities.
Thus, workers might get a sense of fulfilment by doing something they consider worthwhile
(Armstrong and Dawson, 1996). In other words, Deci and Ryan (2010) explain the role of
novelty and challenge provided in various tasks in bringing people’s interest what creates a
kind of intrinsic motivation. They confirmed the salient importance of non-materialistic
rewards over financial ones stating the following: “relative to extrinsic motivation, intrinsic
motivation leads to better conceptual learning, greater creativity, more cognitive flexibility
and enhanced well-being” (Deci and Ryan, 2010, P.1).
Moreover, in his important analysis, Herzberg (1959) assumes the best way to benefit from
the optional effort is through non-financial rewards when employees are motivated
intrinsically. In other words, this intrinsic motivation triggers an encouraging atmosphere to

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work that cannot be triggered through money. In contrast, Giles et al (2014) do not agree with
this announcement and declare that there is no need for intrinsic motivation when financial
incentives are present because the former directly appear when the latter is existing. Totally
the opposite of Decharms (1968) who assumes that intrinsically motivated people never
require an external reward such as money and bonuses, and states that this internal
motivation is enough to perfectly complete different activities. Likewise, Shields (2015)
ignores the financial effect and supposes that intrinsic motivations increase automatically
from the content of the job when it includes challenges and interests. Perhaps Giles et al
(2014) have failed to consider the long-term impact of psychological motivation since public
sector workers in the United States of America have shown a greater emphasis on intrinsic
incentives versus extrinsic rewards (French and Emerson, 2015).
However, Brief and Aldag (1977), and Eisenberger et al (1999) argue that the high amount of
financial bonuses reduces significantly the level of intrinsic motivation, that triggers an
important question: what are the effects of extrinsic with the presence of intrinsic rewards?
How would employees behave when they are given extrinsic rewards if they are already
engaged in an intrinsically interesting task? These questions will be answered in a following
part.
2.1.3 Bonuses and Perks
According to Wilton’s (2019) definition, the third type of reward is described as benefits and
perks. These are non-financial elements, for instance healthcare, subsidised meals or
membership of fitness clubs and might include flexibility in work, or enhancement of sickness
and maternity/paternity leave. Additional examples are given by Marino and Zábojník (2008)
such as personal computers; mobile phones; workplace amenities; good location and view.
Researchers have not treated this type in detail like the CIPD (2006b) who differentiates
between benefits and perks in a way that the former is offered to all employees while the
latter is given to a detached group or individual. Generally, many analysts agree about the
elements of these rewards but Hodor (2016) unlike Wilton (2019), still considers them as an
indirect type of financial rewards since organisations must pay money to get access to some
perks like healthcare, gym membership and employee’s discount.
This type of reward like others, contributes to recruiting, attracting, motivating employees
and assuring the work-life balance of the workforce (Wilton, 2019). Nevertheless, workers

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may not simply accept gifts if they believe these are a substitute for a financial increase (Reilly,
2005). Furthermore, they might be worthless according to what Armstrong and Dawson
(1996) explain. For instance, when you are working in a car company and it gives you a Ford
Mondeo for your private use, maybe you do not like car or you are a single person who loves
sports cars, you would hardly return from your holiday after selling the car and spending the
money on your enjoyable activities (Armstrong and Dawson, 1996). This means when
employers put on these indirect financial payments, they should make sure what value
employees will put on these rewards.
Back to Hodor’s statement which leads to a very important question that was already asked
by Bennardo et al (2010), wondering why not to pay a certain amount of cash instead of these
perks in order to give employees the freedom in purchasing whatever they want? Why go
through a new kind of spending while cash can be an easy way to reward? Bennardo et al
(2010) have answered by themselves stating that these products or services could be
purchased much cheaper through discounts and deals the firm can make, so this will be a
financial saving procedure. Therefore, the company goes for options it thinks it is cheaper
without going back to employees’ choice. In addition, they pointed out the managerial
privileges, as they clarified that managers have started using perks to misappropriate the
surplus brought about by companies. As cash is more obvious and can be easily monitored,
perks can be offered in a way neither approved nor acknowledged by shareholders. In simple
terms, perks are the easiest way for executives to give themselves tax free bonuses.
Recent researches have also revealed to a certain degree two opposite roles of perks. On the
one side, Yermack (2006) found that when organisations announce CEOs’ personal use of
company planes, the stock market values of the firms go down by 1.1% and that firms allowing
the personal use of company planes underperform the market by 4.0% annually. Therefore,
perks consumptions appear to indicate managerial excesses that are harmful to shareholders.
On the other side, Rajan and Wulf (2006) suppose that perks should be offered only where
they enhance managerial productivity. To give an example, company planes are more likely
to be offered to top executives whose companies are headquartered far away from large
airports and in counties with small populations; Chauffeur-driven cars are more likely to be
offered to executives working in headquarters located in either large counties or counties
with longer commute time. Thereby perks here are offered to enhance productivity and

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should increase firm value (Chen, Li and Liang, 2009). Likewise, Bennardo et al (2010) explain
the manager’s use of a corporate jet to attend a business meeting may be justified by the
returns generated for the company. Otherwise, using this jet for an entertainment trip to
reach a hotel in the highlands or on the beach may reflect a misappropriation of the
company’s resource by the manager.
2.2 Rewards Combination
2.2.1 Extrinsic and Intrinsic Rewards
The general interest theory suggests that monetary rewards might have a decremental effect
as well as an incremental effect on intrinsic motivation (Deci, Koestner and Ryan, 1999). In
the first case, the financial rewards procedure may increase intrinsic motives and self-
determination when conveying tasks full of personal or social significance, and satisfying
employees’ needs and wants. Similarly, Harackiewicz and Sansone (1991) say that contingent
rewards positively develop intrinsic motives by creating individual care about doing an
activity. Manderlink and Harackiewicz (1984), Harackiewicz et al (1987) also state that these
rewards have the role of motivating employees intrinsically through making them believe
they are self-efficacious and competent. Conversely, this procedure will decrease intrinsic
motivation for trivial and repeated tasks irrelevant to employees’ needs and wants. In this
situation, Eisenberger and Cameron (1996) suggest that people have the option to decline to
do these boring activities and refuse rewards as they will lack control over their performance,
therefore they will not be performing as requested. Employees therefore will feel as machines
working every day doing the same job, so money will not be the desired objective and may
be worthless in some cases.
Deci, Koestner and Ryan (1999) have found through a meta-analysis of 128 experiments that
people rewarded with money for doing an interesting activity tended to feel this activity less
interesting as well as becoming less creative. Additionally, these activities were unlikely to be
done spontaneously as they had been before rewarded. Another experiment has been
conducted on 300 subjects and found the following: “extrinsic reward demotivates the
intrinsic response of individuals toward a success-failure outcome” (Ma et al, 2014, p.194).
Nevertheless, in a newer research, Deci and Ryan (2010) have agreed with the former
statement but they clarify that those financial extras could enhance or maintain employees’

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behaviours once they are administrated in an autonomy-supportive context. This context as
explained should trigger for the employee a feeling of self-improvement and satisfaction.
However, a common question is always asked: how will people behave once financial rewards
are withdrawn? How will this affect their intrinsic motivation? To answer these questions,
Eisenberger et al (1999) have done an interesting experiment on college students. They gave
each student a task to distinguish subtle differences between pairs of cartoons drawing,
asking them to perform better than former students who had done the same activity. They
divided them into two groups, the first one was promised financial prizes if they reach a better
performance. The second group was working without looking for any reward. The first group
has significantly shown self-determination with great interest in completing tasks much
better than the unpaid group. Then, the rewards have been withdrawn and the first group
was not promised anymore, they have consequently shown a lower performance even than
the second group which has not been promised at all. The researchers have noticed the first
group spending much more time on these tasks than before, which reflects the crucial effect
that can be caused on intrinsic motivation once material rewards are not present anymore.
In other words, they stated that when employees are looking for extrinsic rewards, intrinsic
motivation cannot be the best motivational factor and goes down when these rewards
disappear.
2.2.2 Total Reward
A combination of all recent types can bring the fourth one ‘total reward’ which includes all
aspects of reward namely financial, non-financial rewards, also benefits and perks, where
account is taken of every way which people can be rewarded and be satisfied through their
work (Armstrong, 2007). It is defined typically as: “encompassing not only traditional,
quantifiable elements like salary, variable pay and benefits, but also intangible non-cash
elements such as scope to achieve and exercise responsibility, career opportunities, learning
and development, the intrinsic motivation provided by the work itself, and the quality of
working life provided by the organisation” (Armstrong and Murlis, 2004, p. 11). According to
Rumpel and Medcof (2006), this strategy mainly aims to diversify the reward system in an
efficient way by incorporating rewards that are meaningful to employees. Therefore, when
non-financial rewards are being given, they are integrated with monetary compensations
leading to an effective, inclusive and broader reward system (Rumpel and Medcof, 2006).

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The total reward association (WorldatWork, 2003) has classified the total reward elements
under five categories:
1. Remuneration: cash provided by employers.
2. Benefits: programs used by employers to supplement cash the employees receive.
They aim to satisfy protection needs and are unlikely to be performance based.
3. Work-life balance: policies and philosophies that support employees to be successful
outside the workplace.
4. Performance and recognition: good assessment of individual and team efforts. This
gives a special attention to worker’s behaviours, actions and performance.
5. Development and career opportunities: learning opportunities to enhance employees’
competencies. Career plans to help workers pursue their goals.
The integration of these five keys as shown in figure.1 below results in employee motivation
and talent attraction leading to enhance business performance and outcome (WorldatWork,
2003). However, the level of success of this strategy is linked to the quality of management
of this total reward and its suitability for workers. Once there is good interaction with
employees, it would have positive effects on job satisfaction and engagement which turn into
better results and faster objectives reaching (WorldatWork, 2003).
Figure 1: WorldatWork total reward model (WorldatWork, 2003)

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An example of total reward strategy could be found at the Nike European Headquarters in
Amsterdam, when they offer 5 types of benefits: competitive salary with pensions and
commuting allowance; wellness benefits represented in the flexible work schedule to
promote work-life balance; onsite sports and fitness facilities; the access for continuous
learning which allows employees to grow into new roles and responsibilities; and relocation
support to improve global mindset and skills for long-term sustainability (Wilton, 2019, p.266-
267).
Perhaps the name ‘total reward’ has itself a sense of satisfaction, because it drives to think of
all possible ways to cater to employees' needs seeking to serve the firm's goals. However, this
strategy definitely will not affect all employees in the same way due to the difference of
thinking between them and the way they will be valuing these rewards (Alhmoud and Rjoub,
2019). It is necessary here to clarify that some employees might be more affected by financial
rewards, maybe non-financial and others prefer to be rewarded by perks and perquisites as
mentioned before.
The major challenge of total rewards strategies, according to Marchington and Wilkinson’s
(2005), is that these strategies have more myth than reality. Similar to Kessler (2007) who
explains that despite the significant growth of interest in total rewards, these strategies do
not reflect the main aim they are created for. In other words, Brown (2014) indicates that in
mid-2008 when all companies were trying to apply the total reward strategy, 20% of U.K.
earners have seen a 25% decline in their living standards. This strategy as Brown explains
cannot be the same for all firms, and the most important factor preventing it to succeed is
that firms are copying the strategy with ignoring best practice effects. He states that only 1
out of 10 firms applying the total reward has a well-implemented strategy that fits its working
system and employees. Therefore, he suggests moving to a “smart reward strategy” which is
actually similar to the total reward but more realistic. This should be rooted in organisations’
values and implemented in a more effective way that only relies on facts and accurately
determines benefits not only form companies but also for employees.

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3 Methodology
3.1 Approach to Research Question
Recent years witnessed a controversy about labours motivation, many opinions have been
raised to show the best way to motivate construction employees. However, the way of
motivation used in a certain place might not be suitable for another, it depends on different
factors such as worker’s mentality, location and work atmosphere… All these factors play a
crucial role in employees’ acceptance of rewards and the value they give to rewards
depending on different circumstances. Accordingly, despite some similarities, it is not possible
to find the same reward strategies across all countries in the world. Every single country has
its specific requirements to cope with the work environment, this also differs among
industries even in the same geographic area. With the aim of providing a deep understanding
of rewards and their importance on employees’ motivation, this study offers a comprehensive
literature review classifying reward types and explaining many opinions towards them.
By choosing the construction industry as an interesting topic to discuss, a big difference can
be found between three main countries leading this industry such as the United States of
America, the United Kingdom and the Republic of China. The main questions answered in this
discussion is how do incentives schemes differ between these countries and how does the
employee in each country value those rewards? And after careful review, how this industry
can exploit different opportunities to amend reward systems and get the best mental and
physical outcome from employees?
3.2 Research Methods
The research method employed in this thesis consists of interpreting the reward strategies
applied to the construction industry in each country. This has been done through describing,
contextualising and gaining in-depth insight into the specific concept of reward management
in each of the three mentioned countries. Therefore, the SWOT analysis was used to evaluate
the internal work environment in each country showing the threats and opportunities that
could shape reward strategies. In addition, some factors of PESTEL analysis have taken place
to demonstrate how external factors are very important in building an effective reward
system that not only motivates workers but also retain or attracts talents from abroad.
However, not all PESTEL factors have been discussed, only those which have direct effects in

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shaping reward strategies or employees’ perception of rewards. This has been done in advice
of Mathew miles (1979) who recommends the limitation of investigations and researches to
not overburden the researcher as mentioned in a later section called “Difficulties and
Limitations”. Thus, this will help narrowing the search into most important factors that affect
companies in the construction industries. Through such analysis we can display why not all
employees are motivated in the same way and how they are affected by circumstances that
differ from a country to another. We can also highlight the weakest points that affect the
construction industry and demotivate employees. Thus, showing how to benefit from the
provided opportunities coming from either internal or external factors to enhance the
mentioned points.
Some people might argue that building an effective reward strategy is an internal issue related
to companies’ values and aims (Brown, 2014), and such a study for the macro-environment
may not have this crucial effect on motivation employees. However, the relationship between
external factors and labours motivation cannot be ignored as it is highly correlated. An
example that can be used here to support my point of view in using PESTEL is the current
Syrian situation that shows how political factors can have a hand in affecting employees’
motivation. After the bunch of American sanctions on Syria, people have become highly
demotivated as these sanctions has affected their daily life and led to a historical currency
collapse (Qiblawi, 2020). All kinds of financial and medical aids have been suspended in the
implementation of the United States decision. This bunch of sanctions is completely taken as
an external factor where no Syrian hands were involved and therefore Syrian companies have
become forced to search for new ways to boost workers’ energy.
3.3 Data Collection and Analysis
Since primary data are not permitted, all data are considered as secondary extracted from
published materials such as research articles, printed and e-books, companies reports when
available, government documents, some newspapers and websites. However, data collected
from newspapers and websites are only from those that seem reliable similar to all data that
are chosen based on Lincoln and Guba's Evaluative Criteria. This can evaluate the level of
trustworthiness and reliability of sources and assures their impartiality (Williams, 1986).
Moreover, all articles and e-books are mainly extracted from the University of Glasgow library
website and Google Scholar. Printed books that have been used in this thesis are also found

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in the University of Glasgow Library. These data have been published over the last 20 years,
they also might be based on old researches and opinions published since more than 20 years
ago. These data are then called by Saunders et al (2019) as longitudinal data since they have
been collected over a long time horizon.
3.4 Difficulties and Limitations
Actually the first idea for this study was to start an online survey and face to face or online
interviews with labours and engineers working in the construction industries of the three
mentioned countries. This has been changed after the COVID-19 pandemic when all face to
face meetings have been cancelled and we became allowed to only use secondary data. It
was actually a bit disappointing since I was looking to gather information directly from people
involved in Construction sectors. However, I dealt in the end with secondary data through
many articles and books that are subjectively showing the reward strategies followed in the
United states, the United Kingdom and the Republic of China.
Regarding a qualitative data, there are many weaknesses that are highlighted by Mathew
Miles. He argues that data gathering can overburden and overload the researcher if
investigations are not delimited and treated with the upmost discipline (Miles,1979). Miles
also states that the most difficult point when dealing with qualitative data is the risk of having
an unwell formulated analysis during the initial phases. Robert Yin responded to Miles'
criticism, stressing the importance of thorough preparation and the imperative of reporting
results based on a clear conceptual framework (Yin, 1981). Yin also parallels case study
investigation and police work. The investigation leader will be presented with data of varying
importance and should be able to classify it as such. The investigator may work with a single
case and develop an interim interpretation that may or may not need to be adjusted and
refocused as new evidence emerges.

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4 Findings
4.1 The United States Construction Industry
4.1.1 Why The United States?
After the Recession in 2008, there was a significant decrease in the new constructions value
in the United States. Since then, this industry has started to recover reaching 1.31 trillion USD
in 2019 (Wang, 2020). The construction sector currently hires more than thousands of
workers in several jobs and provides over $645 billion of the Gross Domestic Production to
the United States (Azeez et al, 2019). With reported labour shortages, the most important
matter for this industry is always to have the best qualified and motivated workforce.
Therefore, the construction industry must understand labours needs and wants, how rewards
are being perceived and what factors are affecting this industry in the United States (Azeez
et al, 2019).
4.1.2 Reward systems
The first question to ask here is what do construction workers receive in the United States?
Mohammed Azeez and others (2019) are answering through an online survey taken by a
significant number of construction workers. The first part was about the rewards they get and
their level of satisfaction towards these rewards. Reward types have been classified as
mentioned previously in the Literature: Financial, non-Financial, Bonuses and Perks.
Responses have shown a superiority of financial rewards with an equality between the two
other types and a very low percentage of participants feel they are receiving more than one
rewards meanwhile. However, this study has demonstrated that workers rewarded with more
than one kind of reward are closer to be satisfied with their jobs and feel more loyal towards
their employers (Azeez et al, 2019).
The second question to be asked is what do construction workers actually want? In the second
section of the survey, participants were asked to rank rewards from 1 to 4 according to their
level of importance and show if they are feeling satisfied with them. As such, the majority of
responses tended to classify financial payments the most important reward. in contrast, social
rewards which are considered as part of intrinsic rewards and includes the Performance
support and the work-life balance seemed to be the least important for construction labours
in the United States (Azeez et al, 2019). For Mohammed Azeez, these results were not

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surprising as financial incentives always satisfy the top of the hierarchy of needs as he stated.
However, it was noticeable that an interesting portion (a bit less than 50%) of these
participants do not feel they are getting the monetary payments they deserve.
The third question to be asked: what impacts workers’ reward perception? Therefore, in the
third part of the survey, workers were asked to provide information about 11 variables
namely: Marital status; Race; Region; method of payment; Time with the current employer;
Supervisor job title; job satisfaction; Accident involvement; Number of trades (if the worker
is skilled in two trades or more); Stress level; Number of elements in training (Azeez et al,
2019). An important finding has been revealed through workers’ answers in this part when
the marital status had been ranked as the first factor impacting workers’ motivation among
other factors. It has been found out that divorced and widowed employees have a very less
ability to be satisfied in their jobs, regardless of other factors (Azeez et al, 2019). This mirrors
the utmost importance of the work-life balance which is part of the total reward strategy
already mentioned in the literature review. Similarly, other authors have confirmed the
crucial effect of marital status on construction workers. for instance, Shan et al. (2017) have
illustrated that unmarried construction workers are less to be satisfied with jobs than others
who are considered stable in their personnel relationships. In this case, Yongwei Shan et al.
have explained that rewards are being less valuable when offered to an employee who is
already affected by external factors the company has no hand in (Shan et al., 2017).
4.1.3 Discussion
It has been clear through the findings that construction companies in the United States are
focusing on financial payments more than anything else. This is not surprising, since U.S.
workers have shown more interest in money than social and intrinsic rewards. However,
monetary rewards are losing their value when given to workers who already have social
problems. It is not surprising to me, as Markova and Ford (2011), that workers all over the
world not only in the U.S. may choose money as the first option, ignoring other kinds of
rewards. This is the human instinct, but workers will start find money less valuable when being
involved in troubles that cannot be solved by money (Markova and Ford, 2011). Accordingly,
construction companies in the U.S. have got much to do in the psychological side, especially
by lifting the importance of having intrinsically stable employees.

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4.1.4 SWOT Analysis
The SWOT analysis could be a valuable management model for strategic planning (Pickton
and Wright, 1998). As incentive schemes are part of organisation plans and systems, therefore
this tool is recommended to focus on the critical issues that affect business growth and
development.
Table 1: SWOT analysis of the US Construction Industry
Strengths  presence of digital technologies
 Digital supply network
 Automation at construction
Weaknesses  Workers shortage
 High financial-based reward systems
Opportunities  Very high investment
 high level of research and development
 New projects to be launched regularly
Threats  COVID-19 pandemic
 Economic recession
Strengths: The presence of technological advances in the United States might be the most
strengthful point of the construction industry. Michelle Meisels, US engineering and
construction leader, explains the role of these technologies in greatening construction
efficiency especially in the second quarter of 2020 during the COVOID-19 outbreak (Meisels,
2020). She also clarifies that construction automated robots are helping companies’
dependence on workers by completing repetitive tasks such as bricklaying. This is very
important for employees’ motivation since these tasks tend to be boring therefore start to
demotivate workers (Fisherl, 1993). Similarly, drones are used for remote surveillance and
site inspections (Meisels, 2020). Therefore, the U.S. construction industry has the necessary
materials to sustain and protect employees. Such actions might have positive effects on
workers’ loyalty and consequently their motivation, once they feel their companies are caring
and trying to protect them in such a disaster.

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Opportunities: The U.S. construction industry can be considered as one of the richest
industries in the world. Wang’s article on Statista website shows the huge investment in the
construction sector with an estimation to exceed $1.45 trillion in 2023 (Wang, 2019). Plenty
of projects are ready to be launched in the United States, either for the public or private
sector. Zachary Phillips has revealed a mega project announced by Google in California. The
project to be built on 40 acres of land, includes 1.3 million square feet of office and 30,000 of
retail space, 1, 850 housing units with 12 acres of open space (Phillips, 2020). Apparently,
such projects lead to strengthen construction companies and industry in general. They also
facilitate the ability to invest in new researches that can help companies identify the nature
of employees they have and find consequently best stimulation systems.
Weaknesses: Jerry Howard, CEO of the National Association of Home Builders (NAHB) In the
United States has revealed that labour shortage in the U.S. construction industry is adding
$6000 to the cost of every home in Dallas with two months’ delay in completion (Porter,
2019); This is warning the US industry so far, especially with the presence of incentive
schemes that are almost relying on financial payments as rewards. The more construction
companies the more they become less able to offer rewards. Additionally, the biggest
weakness represented in such systems is they are significantly affected by any economic
fluctuation. Therefore, any financial decline would result in a monetary lack that leads to cuts
in wages and rewards and the demotivation of employees.
Threats: Obviously, the most harmful threat has taken place with the spread of COVID-19
which is notably affecting the construction industry. A recent article by Deloitte displays the
lack of confidence between U.S. construction industry leaders after the coronavirus outbreak
(Meisels, 2020). Michelle Meisels said this pandemic has suspended all type of construction
projects in the U.S. what put financial pressure on construction companies. She also supposes
this virus might reshape project types for many coming years with public utilities, healthcare-
related projects to be more attractive (Meisels, 2020). Subsequently, the increase of pressure
on construction companies might end in financial difficulties, that will be mirrored in the
incentive schemes applied in the US. For this work environment when the vast majority of its
motivational items rely on payments, any financial decline will be harmful and might end up
decreasing employees’ motivation to a minimum.

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4.1.5 PESTEL Analysis
PESTLE model offers a useful approach to studying a firm’s business environment and identify
opportunities to improve and sustain. These factors are classified as: Political; Economic;
Social; Technological; Environmental; and Legal (Shaw, 1999). However, not all factors will be
discussed as mentioned in the Methodology.
Table 2: PESTEL analysis of the US Construction Industry
Political  Trump’s tariffs on Chinese imports
Economic  Trump weighs $1 trillion for infrastructure
 Tax cuts and deregulation
Social  High divorce rate in the U.S.
Legal  Immigration law
Political: Earlier in summer 2018, President Donald Trump has approved additional tariffs on
Chinese imports (Cornett, 2018). Despite many observers agreed long-term benefits, but
there were still some effects at the short perspective. The construction industry in the US as
other industries was affected by these political decisions that led to an increase in Chinese
materials prices. As explain Bryant Cornett, this rise in raw materials especially steel and
aluminium have accelerated the trend for inflated construction cost that has been taking
place for many years before. Therefore, as mentioned earlier, ay economic fluctuation would
be so harmful for such systems based on financial incentives.
Economic: From an economic point of view, many decisions can have an obvious effect on
the construction industry in the United States. President Trump has recently allocated $1
trillion to start and renew infrastructure projects (Leonard and Wingrove, 2020). This would
and refresh the construction industry and its economy and positively impact construction
companies by making them able to offer financial rewards with no troubles. Also, a recent
provision issued by President Trump to decrease the federal corporate income tax rate from
35% to 21% (Brown, 2018). This was very impactful for small companies as explained by Mike
Bellaman, CEO and president of Associated Builders and Contractors, who clarified that only
2% of U.S. construction companies employ more than 100 people (Brown, 2018). Bellaman
literally said: “That extra dollar that flows to the bottom line that doesn’t go to tax is another

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dollar can invest in hiring someone, giving them more rewards, buying a new piece of
equipment — all in the interest of investing in the growth of their business” (Brown, 2018,
p.1). Having reviewed this point, it seems such a many economic decisions can strongly affect
reward systems in all kinds of companies. With Mr. Bellaman’s speech, we can see that tax
cuts can be transformed into rewards which turn in employees’ motivation, retention and
attraction with leading to build more effective payment systems.
Social: A social factor that could be effective foe workers’ motivation in the U.S. industry is
represented by the high divorce rate. Erin McDowell, a writer on the Business Insider website,
said that around 40% of all marriages in the United States end in divorce which is something
to be wary of (McDowell, 2020). This statistic takes us back to the relationship between
employees’ motivation and their marital status. When the construction sector in the U.S.
employs more than 11.2 million people (Wang, 2020) and with this very high divorce rate, the
following can be assumed: around 4.5 million construction employee may be exposed to
social problems that can be crucially declining their motivation. Therefore, with the aim of
making financial incentives more effective it seems like U.S. construction companies should
intense their care of workers’ psychological side in the American community.
Legal: Moving to another perspective related to a legal factor concerning the immigration
system in the United States. The post-election period has witnessed new immigration laws
more restricted and complicated. The new executive order security contains several sections
that include limits on asylum access, enhanced enforcement along the US-Mexico borders
and the construction of 2,000-mile border wall (Center for Migration Studies, 2020). The
construction industry as others is affected by these bunch of new laws, and this has been
mirrored directly into a harmful labour shortage. Marc Padgett, an American engineer, is
worrying of a further reduction in construction workforce, which could be devastating
(Karaim, 2017). However, from a different point of view, this can be reflected to the reward
schemes and employees’ stimulation. The lack of skilled workers due to these legal policies
might decrease the competition among the construction workforce which leads to lower level
of motivation. In other words, immigrant skilled workers could compete with local ones,
therefore they will be unconsciously motivated in order to save their positions. My point of
view has been already confirmed by Bob Aiello (2015) in his article “Managing the High-
Performance Computer Society Standards Working Group”.

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4.2 The United Kingdom Construction Industry
4.2.1 Why The United Kingdom?
One of the largest industries in the United Kingdom in terms of revenue and employment rate
is the construction industry. In 2017, this industry contributed 6% of the total British
economy, which means £117 billion (Rhodes, 2019). Also, more than 2.4 million employees
are employed in this industry since the second quarter of 2019, almost 6.6% of all jobs in the
UK (Rhodes, 2019). The Gross Value Added (GVA) of the construction in the United Kingdom
has undergone a plunge in the 2008/2009 recession. thereafter, the GVA has been recovering
slowly during the post-recession period until reaching a peak in 2017 (Rhodes, 2019).
However, Chris Rhodes indicated in his article “Construction Industry: Statics and Policy” that
the construction sector has the highest percentage of self-employed jobs, almost 3 times
more than the whole economy which is 11%. In other words, many jobs in this sector rely on
contracts to work on specific jobs but not permanent hiring (Rhodes, 2019). Wherefore, this
reflects different thinking of rewards that can be offered in the United Kingdom to motivate
construction employees.
4.2.2 Reward systems
Referring to what kinds of rewards are offered in the British construction industry, Carrillo et
al. (2004) have explained this in their study of knowledge management in the construction
industry. They acknowledge that reward systems adopted by companies in this industry are
mostly financial-based systems with up to 60% of the total; 20% could be considered as
partially financial and described as promotional-based schemes when financial bonuses are
offered with promotions and upgrading; The rest are rewarded in terms of intrinsic and social
rewards like knowledge sharing, paid leave, etc… (Carrillo et al., 2004). However, a study done
by Young et al. in 1998 on employees of the British public sector, has not found a significant
correlation between salaries and job satisfaction (Chinyio et al., 2018; Young et al., 1998).
From here, it can be concluded that, apart from money, other factors can play a motivational
role in a country such as the United Kingdom.
As explained by Druker and White (1997), the British construction industry employs a very
high number of atypical workers and a fast fluctuating workload. Consequently, always new
reward forms are expected to be invented by managers under the search to cope with every
new situation the industry undergoes (Druker and White, 1997). With this inconstancy,

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employers in the United Kingdom have come with a new payment system called “employee
ownership” (Oliver, 1990). This motivational scheme as Nick Oliver explains, includes
employee share ownership, profit sharing and producer cooperatives among academics and
practitioners. Oliver also assures the new system advantage in increasing satisfaction and
commitment saying the following: “From a business-efficiency perspective, giving employees
a stake in their organisations is seen as a way of encouraging a responsible attitude on the
part of the workers, and as means of generating a community of interests between
management and workers” (Oliver, 1990, p.513). In 1997, Druker and White found the vast
majority of construction firms were adopting performance-related pay systems and teams
based on reward systems. This is seen as a type of profit-sharing reward which is already
explained in the literature review. However, the American Productivity and Quality Center
(APQC, 2001) sees this system as hard to operate in the construction context, since it is tough
to distinguish between individuals in a team when payments are related to group
performance. Yet, as a civil engineer, I can say that the most important for construction
companies is the whole team performance and not every single individual apart. However,
team performance-related systems tend to ignore individual excellent performers who might
put less effort into jobs by just going with the team flow, therefore they will be unequally
evaluated (Campbell et al., 1998).
The new payment has been originally adopted from the United States and updated in the
United Kingdom by Patricia Zingheim and Jay Schuster in 1992 (Druker and White, 1997).
Traditional pay systems are typified by seniority-based pay progression, service-related
benefits and payment by time. In contrast. New pay system objectives are to increasing
control overpayments by make them fluctuate according to business circumstances (Druker
and White, 1997). The approach of this payment design is shifting the tradition job-related
pay to person-related pay as argue many writers (Gomez-Mejia and Balkin, 1992; Lawler,
1990; Schuster and Zingheim, 1992).
However, the construction industry in the United Kingdom has 2 types of employees as state
Janet Druker and Geoff White: manual and non-manual workers (Druker and White, 1997).
The first is described as always mobile from job to job and from employer to another such as
Electrical contracting and plumbing. This type of employee benefits from some rewards apart
from monetary payments, like holiday pay, death benefit and payment on retirement after a

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long term commitment (Druker and White, 1997). On the other side, non-manual workers like
professional workforce, managers, technical, etc… are differently treated. This group has
additional payments with more relaxing work outside construction sites. Bonuses are
represented in “one-off” merit, overtime pay, profit share bonuses, SAYE (Save As You Earn)
schemes and project completion bonuses (Druker and White, 1997). All these bonuses are
addition to paternity/maternity, sickness leaves, different kinds of loans, relocation and care
user allowances.
Regardless of the non-manual workers’ superiority, it seems like manual and non-manual
workers in the British construction industry are almost treated with total reward strategies
which brought about high jobs satisfaction in this industry.
4.2.3 Discussion
With an incentive scheme like the one used in the United Kingdom, it seems that the British
construction workforce tends to be satisfied. Gazioglu and Tansel (2006) indicated through a
survey that 60% of UK workers are between satisfied and very satisfied. Also, another article
in 2017 has demonstrated the following: 72.5% of construction employees are happy and very
happy with their jobs (Poongavanam and Viswanathan, 2017); 15% are partially happy and
the rest is considered unhappy and very unhappy. However, it is not surprising to have this
percentage in a work community that adopts profit-sharing systems, since employees when
considered as shareholders, are about to show up their best with aim of being fully rewarded.
Many researchers have confirmed the former perspective stating that commitment among
employee shareholders is much higher than non-shareholders in the same firms (Goldstein,
1978; Russel et al., 1979; Oliver, 1990). This high satisfaction in the UK construction industry
stems from effective reward systems embraced for a long time and applied with best practice
without being blindly imitated. Also, Total reward strategies as explained in the Literature
review is a good way to manage intrinsic and extrinsic sides of employees which leads to high
levels of motivation and job satisfaction.
Nevertheless, it worth noting that the former payment system is a major factor in employees’
risk-taking especially in the construction industry. In other words, on-site employees working
in productivity-bonus systems might forget their safety importance while achieving the
desired level of performance (Langford et al., 2000). This has been reported by Leila Steed on
the Construction Europe website, referring to the construction industry as the third most

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dangerous industry in the UK with 30 work-related deaths in 2019 (Steed, 2019). Therefore,
under the hood of realising the value of the human resources, construction companies that
use profit-sharing systems like in the United Kingdom must maintain and update workers’
knowledge and skills in order to prevent accidents and assure workers’ safety.
4.2.4 SWOT Analysis
Table 3: SWOT analysis of the UK Construction Industry
Strengths  Increase in sales of construction products
 Effective strategic planning
Weaknesses  Slowness to exploit new technologies
 Lack of leadership style
Opportunities  High level of research and development
 High urban development
Threats  COVID-19 pandemic
Strengths: In the first quarter of 2019, the British construction industry has witnessed an
outstanding increase in product sales as stated by Rebecca Larkin, a member of the
construction products association in the United Kingdom. Mrs. Larkin revealed a rise of 54%
of heavy side manufacturers and 29% of light side manufacturers (Larkin, 2019). This point in
reflection shows the great dynamism of this industry and how companies are still
advantageously able to maintaining effective reward strategies in their inner systems. On
another perspective, the majority of British companies are characterised by long-term
planning. Goodier (2007) explains that senior construction managers in the United Kingdom
“have been involved in the formulation of long-term strategic planning and decision making”
(Goodier, 2007, p.170). the former statement is obviously shown in the construction industry
previous surveys that revealed the high satisfaction level of British employees. In term of
planning, reward systems cannot be ignored since manpower is the bedrock of every success
and its management is a must to sustain and achieve long-term goals. Therefore, the British
success in construction cannot be linked but to the good management of human resources.

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Opportunities: The United Kingdom is considered as a leading country in research and
development, which is always taken as an opportunity for any kind of development. According
to Cecil Prescott, from the Office for National Statistics, the UK expenditure on research
reached £37.1 in 2018 with an annual rise of 4.8% (Prescott, 2020). This research as
mentioned before are good opportunities to constantly improve the construction industry in
terms of human resource management especially workforce training and education. Another
opportunity for British construction companies is represented in urban development. The
demand for homes is soaring with a limited number of available houses (Building Products
Magazine, 2019). Therefore, in terms of new build housing, the UK government has aimed to
add 300,000 homes to the market every year by 2020 (Building Products Magazine, 2019).
Consequently, this represents an amazing opportunity for construction companies to develop
and draw up long-term plans, thus following effective reward strategies to build a motivated
and skilled workforce.
Weaknesses: Despite the provided technologies in the United Kingdom and the continuous
development in several technological fields, the construction industry is always the slowest
to exploit new technologies. David Madigan in 1997 criticised the British construction industry
for its slowness in exploiting information technology in its main value-adding processes
(Madigan, 1997). Among all UK industries, this industry has shown a weakness in this matter
which is crucial for employees’ retention and talent attraction. For example, as a civil
engineer, the best workplace to attract and motivate me is where I find new technologies that
facilitate my duties and decrease my work tiredness as much as possible. Wherefore, in terms
of reward systems, new technologies can be seen as rewards sometimes when they make
work tasks easier. Madigan (1997) also refers to another weakness in the British construction
industry, represented in the lack of leadership style. David explained this industry must have
more interactions between project managers and labours. These interactions represent the
core of intrinsic motivation which would not be achieved without direct conversations from
managers to labours showing care and support.
Threats: The British construction industry also has not been spared from the COVID-19
pandemic. However, this industry has been significantly affected as it contains many manual
tasks that cannot be completed online as others. A recent article by The Guardian reported a
big slump in the main construction activity index that fell from 39.3 in March 2020 to 8.2 in

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April of the same year (Kollewe, 2020). More than 80% of construction firms reported a drop
in business activity which has put them under hard financial pressure. Therefore, the Minister
of State for Building Safety and Communities launched a new recovering roadmap in May
2020. This strategy consists of temporary extensions to working hours on some sites in order
to facilitate safe working and allow task completion with adhering social distancing and
government guidelines (UK Parliament, 2020). this resulted in construction companies are
about work on sites out of the official working hours (8:00 a.m. to 5:00 p.m.) to deliver
projects on time. Here new reward strategies should be applied since workers will be onsite
working in hours they did not use to work in. While the labourer is supposed to be with his
family or doing hobbies, these companies are asking him to be working which would be hardly
accepted, and even if accepted it will be so demotivating. Wherefore, new reward strategies
must be launched even if temporarily with the aim of lifting workers’ motivation up. This
requires higher payments or more work flexibility and bonuses to employees in a way they
feel compensated.
4.2.5 PESTEL Analysis
Table 4: PESTEL analysis of the UK Construction Industry
Political  Decrease competition after Brexit
Economic  Constant increase in materials cost
Legal  Brexit effects
Political: With the European Union policies, British construction companies are facing a hard
competition with several European companies. This competition to be mitigated in the post-
Brexit period with new British policies when European firms will have to pay taxes (Institute
for Government, 2020). Brexit from this perspective can be an opportunity for construction
companies in the British market as this competition will be less difficult which leads to reduce
financial pressure. Thereafter, these companies will be able to create more effective reward
strategies. In other words, by decreasing the financial pressure, companies can increase their
rewards in term of monetary and partial-monetary bonuses in order to retain skilled
employees and motivate workforce in addition to attract talents from all over the world.

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Economic: For all reward systems, especially those based on financial incentives, any financial
threat would be harmful and may affect the payment systems. The Chief Executive of the
National Federation of Builders (NFB) Richard Beresford says: “Member reporting indicates
bad news for the sector as material costs keep increasing while contractors’ order books
continue to decrease” (Larkin, 2019, p.2). This rise might be an alert for British construction
companies to rethink their financial reward schemes especially after Brexit when these
materials will not be priced as before since new import taxes would be imposed.
Legal: Once talking about Brexit, no one can ignore its effect on human resources in the whole
UK not only the construction industry. The construction industry employs 8% EU nationals
except for London where this amount is 28% (Building Products Magazine, 2018). These
numbers fire an alarm of labour shortages in the British construction industry especially
because skilled workers’ problem has been an issue for the construction sector since 2013
(Building Products Magazine, 2018). Consequently, the Chartered Institute of Personnel
Development (CIPD, 2017) reported 72% of Human Resources professionals to expect a very
high post-Brexit competition for qualified and well-skilled talents. The Royal Institution of
Chartered Surveyors also warns that 30% of construction professionals believe that non-UK
workers were critical to their business success (Building Products Magazine, 2018). Therefore,
when talent acquisition will be focusing on British talents, it seems crucial for companies to
manage smarter reward systems that attract talents and are more suitable for British labours.
This would be useful as well to prevent the loss of UK talents to outside the Kingdom.

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4.3 The Chinese Construction Industry
4.3.1 Why China?
Since 2008, statistics have shown a significant added value of approximately 7.09 trillion yuan
in the Chinese construction industry, equivalent to 1.037 trillion USD (Statista Research
Department, 2020). In 2013, the total construction spending reached 1.78 trillion USD and
the Chinese construction industry was by far the largest construction market in the world
(Statista Research Department, 2020). Additionally, the five largest construction companies
worldwide were all Chinese in 2018 (Statista Research Department, 2020). In the same ear,
the largest construction company, China State Construction Engineering Corporation (CSCEC),
generated around 1.2 billion yuan of revenues (Statista Research Department, 2020).
Therefore, it has always been important for this industry to have a high-skilled and motivated
workforce. This would have never happened unless they had efficacious incentive schemes
and powerful Human Resources Departments. However, before this thriving period, many
writers have highlighted plenty of problems concerning HR management in Chinese
construction. One of the most influential was the lack of efficient motivating rewards which
had led to high employee turnover (Zhai et al., 2014; Ma, 2005; Song, 2004).
4.3.2 Reward Systems
Due to the massive growth in Chinese construction, Human resources Departments have
been obliged to apply new incentive schemes that motivate employees and serve
organisations to reach their objectives. Consequently, HR professionals have managed to
bring Western management philosophy into China, particularly remuneration systems (Luk
and Chiu, 2002). Therefore, compensation payment procedures have been gradually
implemented in several Chinese sectors including the construction industry. For instance, the
“iron rice bowl process” according to which employees have been employed in jobs for their
whole life regardless of performance, have been replaced by reward strategies more modern
and effective in keeping the fluctuation of the market economy (Luk and Chiu, 2002; Chow,
1992). The new systems additives include (Luk and Chiu, 2002; Chow, 1992):
 Higher wage differentials
 New wage system: basic wages, position and floating wages
 Performance-related pay

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 Provide benefits like bonuses, paid vacations, promotion opportunities.
These changes as mentioned aim to stimuli individuals and teams then decrease the turnover
rate in the Chinese industry. Chow (1992, p.43) says about the new policies: “allowing some
to get rich first”, and explains workers who would be richer are those who will show higher
performance.
Chinese employees like others prefer money in the first place, as they see cash as the most
important option that makes other options affordable. Luk and Chiu (2002) indicate that base
salary, merit pay and annual bonuses are respectively the three most important items for
Chinese workers. Annual leave, cash allowance and house provision come after in terms of
importance. However, Chinese systems were applying annual pay increase regardless of
changes in performance, based on seniority level. Employees, therefore, have asked for a new
egalitarian approach in rewards distribution as the one mentioned in the previous paragraph,
based on their change in performances not on seniority and employment tenure (Becker and
Gao, 1989; Xing, 1995). Chinese workers have a traditional view of the pay-performance
relationship, the harder they work, the more they get. It is obvious through several studies
such as Becker and Gao (1989), Chow (1992) and Xing (1995) that Chinese culture has been
designed to pay increases on a performance basis. These performance-related pay systems
resulted in a very high performed workforce which led to a high level of successes and
advancements in the Chinese construction industry and being ranked as the best in the world
for many years.
Apart from the monetary spot, the Chinese workforce has always had an accommodation
problem especially on-site construction labour. The component that always appears in
researches and employees survey is housing provision, this benefit is highly valued by local
staff in China and advantageous for companies in talent attraction and employees’ retention
(Luk and Chiu, 2002). Four different facts have made this service crucial in China namely:
workers coming from other provinces need residences to stay (Luk and Chiu, 2002); foreign
companies offer housing facilities much better than state-owned firms (Greene, 1991);
unaffordable houses for Chinese employees with the continuous increase of real estate prices
(Sensenbrenner and Sensenbrenner, 1994); some companies allow employees at certain
seniority levels to use their local apartments (Sensenbrenner and Sensenbrenner, 1994).

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Huang et al. (2018) have done empirical research studying the effects of these systems in the
Chinese work communities since their first implementation. They called the new systems
“high-performance work systems” due to the great work achieved under the objective of
being more rewarded (Huang et al., 2018, p.1). Therefore, this study has revealed that these
payment systems are highly related to employees’ positive mood and satisfaction, which led
to high employee engagement. Consequently, the level of satisfaction towards these reward
systems are seen to be very high, since these systems have been already implemented in
response to the traditional mentality of the Chinese labour.
4.3.3 Discussion
Despite longer working hours in China which may reach 44 hours a week, the level of job
satisfaction in the construction industry in China looks relatively high. thence, this mirrors the
Chinese working culture which was the foundation of the unprecedented Chinese economic
growth since 1979 (Nie et al., 2020). This Culture might have made the Chinese worker more
resilient and abler to accept different work circumstances. Yet, we can conclude that work
ethics can shape job expectations, satisfaction and motivation levels. Thence, the Chinese
industry might be the best workplace that explains this point of view. The mentality of Chinese
employees consists of making more money by working harder, this has been contributing
many years ago in the magnificent growth in the local construction industry. However, with
more than twenty years using these reward systems, it seems worthy for construction
companies to start searching for new kinds of rewards or new incentive schemes in order to
keep pace with the development of these systems. With a high-connected world, the Chinese
workforce would be affected by other relaxing systems that ask workers to work less and
therefore will gain their attraction (Nie et al., 2020). Therefore, the coming duty for the
Chinese construction companies is to have a mixed system of western and current systems to
keep pace the change in the Chinese labours mentality.
4.3.4 SWOT Analysis
Table 5: SWOT analysis of the Chinese Construction Industry
Strengths  Abundant cheap workforce
Weaknesses  Limited extent of using Information communication technologies
(ICT)

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 Lack of research and development practices and motive
Opportunities  Productivity and sustainability-driven new urbanisation
 Booming international construction market
Threats  Intense Competition for Talented People
 Lack of trust in foremen
 COVID-19 pandemic
Strengths: While the United States and Europe are suffering from a workers crunch; China
has a huge number of construction workers. This is one of the major factors contributing in
thriving the Chinese construction industry locally and worldwide (Lu et al., 2009). Statista
Research Department in China stated in 2019 that the construction workforce reached
around 55.6 million by the end of 2018 (SRD, 2019). This abundance is easing the job of
Human Resource Departments from the side of motivation since employees are forced to
perform as high as they can in order to maintain their positions. In other words, plenty of
workforces itself can be considered as a motivation item where employees are always afraid
of being replaced, which leads them to show their best. Therefore, it actually reflects the
nature of reward systems presented in China which are based on the payment-performance
relationship.
Opportunities: Over the last two decades, more than 2 billion people were swarming into
fourteen cities in China due to high population inflation (He et al., 2016). The United Nations
Department of Economic and Social Affairs revealed in 2015 an expectation of the Chinese
population to raise 29 million by 2050 (UN DESA, 2015). Therefore, dwellers demand is
increasing rapidly, new house construction would never stop in the short term perspective.
Jiang et al. (2018) expect construction companies to build 500 units a day to meet the growing
demand for living in China. This consequently creates the need for new infrastructure for the
coming decades, therefore the Chinese construction industry is asked to lift up productivity
and being faster in dwelling inventory (Jiang et al., 2018). In terms of rewards, these
opportunities give companies a sense of stability as future projects are ready on their
roadmaps. However, these firms still have hard work to do in their incentive schemes, since
the current systems are being older and it is a must to find more advanced systems that help
to achieve the objectives of the coming span. As mentioned before, with the rise of pressure

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on the construction companies, besides the highly connected world we reached today,
Chinese employees will not be able to keep performing outstandingly in the current system,
and the need for renewing these schemes is crucial.
Weaknesses: Information communication technologies (ICT) are significantly influencing all
worldwide construction operations. ICTs are used for collaboration, knowledge management,
procurement, process improvement, etc… (Ballard, 2002). In Chinese construction, ICTs
application is considered slothful in time when these technologies are vital for project
execution and implementation (Lu et al., 2009). In 2006, Xu and Greenwood have surprisingly
reported the lack of engineering software even in very large Chinese companies, such as
Primavera Project Planner and Microsoft Project. However, another weakness is highlighted
by Mao et al. (2015) who explain the lack of research for practices and motives in the Chinese
constriction industry. They explain the limitation of using advanced construction methods,
and the implementation of the Chinese construction in the international market only into
three traditional types of structures: timber structures; steel; and prefabricated concrete. Liu
(2012) also clarified that Chinese construction companies still miss the national standards
techniques and procedure of designing, fabricating, assembling and demolishing the former
structures.
Therefore, as mentioned before, it is hard to attract high skilled workers with a lack of
advanced technologies which are considered as a kind of reward. Thus, talented employees
will move to work overseas where they feel more comfortable and more valued with the
presence of technological progression. Chinese companies should then focus on rewarding
employees by providing technologies that facilitate their tasks.
Threats: In the face of the booming international market, the hard competition for competent
employees augments day by day and the construction industry in china is always afraid of
losing talents to foreign industries (Lu et al., 2009). Wherefore, The Republic of China has
witnessed a severe brain drain to companies overseas where Chinese talents chose to work
in better work conditions and higher salaries compared to local Chinese companies (Lu et al.,
2009). This threat has been resonated by Sun (2004) who warned the Chinese government
and companies to find new systems that lead to stop this action. Despite the good job
satisfaction in the Chinese industry, employees are always keen to get higher wages and more
comfortable work conditions. Here, it is the role of Human Resource Departments to

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introduce more sophisticated reward strategies that stop the brain drain and lessen
employees’ turnover. Despite the acceptance of performance-related-pay systems in China,
there still a need to reward the Chinese workforce at a level approximately close to
international incentives, especially in terms of salaries and financial bonuses. This would slash
employees’ willingness to go abroad and show their skills apart from the Chinese industries
(Sun, 2004).
Another threat to be discussed in this part and seen as crucial towards workers’ stimulation
represented by the relationship between managers and foremen in the Chinese construction
industry. Mossman (2013) clarified the lack of trust and reliability between project managers
and foremen which would spread an atmosphere of untrustworthiness among employees and
employers. This problem as to explain Mayer et al. (1995) stems from the managers' fear of
delay, which leads them not to trust foremen in some risky tasks since managers are those
who bear pressure from clients. So, this might contribute to demotivating employees by
making them feel untrusted by employers, which will be directly reflected in their
performance. Consequently, construction companies should build trusty relationships
between employees, foremen and managers in order to facilitate the achievement of their
objectives. Therefore, as mentioned before, it is hard to attract high skilled workers with a
lack of advanced technologies which are considered as a kind of reward. Thus, talented
employees will move to work overseas where they feel more comfortable and more valued
with the presence of technological progression. Chinese companies should then focus on
rewarding employees by providing technologies that facilitate their tasks.
4.3.5 PESTEL Analysis
Table 6: PESTEL analysis of the Chinese Construction Industry
Political  Strong Government Support
Economic  Development Barriers (Tariffs)
Legal  Development Barriers (Visa Permits)
Political: From a political side, Lu et al. (2009) explain a crucial role for the Chinese
government in the construction thrive not only in China but also abroad. The government has
made negotiations with foreign governments in order to mitigate restrictions and reduce

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bureaucratic obstacles for Chinese companies. Additionally, these companies are highly
supported by the Chinese government in getting loans from state-owned banks (Lu et al.,
2009). These steps have contributed to the international development of the Chinese
industry, consequently to the workforce training and talent attraction. Also, good financial
support is the root of successful reward systems, since it helps companies to maintain their
employees with any economic fluctuation, this forms an important success factor for the
Chinese construction industry.
Economic and Legal: There are a lot of barriers facing the Chinese construction industry in
terms of international development. China has joint the World Trade Organisation (WTO)
since 2001, which opens many doors to expand in front of Chinese industries as the former
organisation encourages free trading and calls to lower entry barriers (Lu et al., 2009).
However, the WTO is not enough with the establishment of political unions like the EU, in
addition to trade deals between the US and the EU. While these countries are easing their
trade movement, a lot of barriers still in front of the Chinese industries in their way to expand
internationally (Lu et al., 2009). This precludes the international expansion of the Chinese
construction industry and leads to lose more talents to foreign companies (Lu et al., 2009).
Additionally, Chinese employees are still constrained by visa permits, which reduces the
Chinese workforce’s chance of gaining experience overseas as well as companies’
international expansion. Here, the role of Human Resource Departments comes to create
reward strategies build on an intrinsic-basis with significant importance for training and
development. As explained by Luk and Chiu (2002), the Chinese employee is keen to learn
more by leaving the Republic. Therefore, this must be provided by local companies to stop
losing talents and retain Chinese workers.

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5 General Discussion and Conclusion
First, this study has started with clarifying reward types and combinations through a neutral
criticism of different writers believes. It has then pointed out different kinds of reward
systems adopted in three different countries considered as leaders of the worldwide
construction industry. SWOT and PESTEL analyses have been also drawn to explain how
internal and external factors, even if not directly related to firms, could shape the reward
strategies applied in certain companies.
The increasing globalised world economy has created a vital need to understand different
Human Resource Management practices, particularly the way employees can be managed
and motivated. We can say based on the previous findings that the global expansion of
Western Capitalism has made people more attracted to money than anything else. People
became disenchanted with moral incentives, and prefer to take cash instead of being, to an
extent, morally stimulated. All monetary payments such as base salary, merit pay and
month/year-end bonuses were found to be the most important for all employees across the
three countries that have been studied. We can conclude that “cash mentality” is obviously
predominant in the current capitalism system, where money can never be replaced.
However, findings have shown little differences between the three mentioned countries,
these stem from the psychological value of cash in each community. Yet, all reward systems
that took place in this study are financial-based systems, where the money is the foremost
reward employees want to receive. This is Indisputable and also unsurprising to me as it
reflects the normal human instinct. Notwithstanding, Gangwar and Goodrum (2005) have
vitally pointed out the effectiveness of rewards with time, stating that any reward including
money will become less effective day by day when employees got used to it. The former
statement warns Human Resource professionals to continuously reinvent rewards, not
necessary to replace financial payments, but those that can be rewarded beside money and
always changeable and exciting.
Therefore, one of the most important tasks of Human Resource professionals is to find
effective ways that can take place with money to extract employees’ best performances.
Rewards should not only motivate employees but also augment their loyalty to their
employers and jobs. The construction industry, in particular, is characterised by hard and risky

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tasks especially onsite, so any economic drop would end in diminishing rewards value leading
then to high employees’ turnover. From this point, I agree that thinking of the psychological
side of workers would more useful to motivate them, always with the presence of financial
payments. This from my point of view will make the employee more loyal as he/she feels
him/herself treated not as a machine that has a mission to complete, but as an important
member that has the most appreciation. Subsequently, the lack of money with any fluctuation
might not have the same negative effects on employees’ motivation and retention. I strongly
believe this can be found to some extent in the profit-sharing systems adopted in some British
companies, as employees feel more belonged to the job itself.
Last but not least, profit-sharing systems have many advantages in motivating employees and
increasing their loyalty, but they still have some defects that affect entrepreneurs and
business founders. Those people who used to have hierarchical systems might not accept
employees as partners while they see them just as machines that complete missions to reach
organisations objectives and goals. Yet, Reilly (2005) has shown the lack of quality after
applying a profit-sharing system in Royal Mail as mentioned in the Literature Review.
However, new researches should take responsibility for finding out the disadvantages of these
systems in the construction industry, showing its perception from both sides, employees and
employers.

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