Journal of Business and Economics, ISSN 2155-7950, USA January 2013, Volume 4, No. 1, pp. 1-12  Academic Star Publishing Company, 2013 http://www.academicstar.us 1 The Effects of Employee Recognition, Pay, and Benefits on Job Satisfaction: Cross Country Evidence Mussie T. Tessema 1 , Kathryn J. Ready 1 , Abel B. Embaye 2 (1. Winona State University, USA; 2. University of Arkansas, USA) Abstract: This paper analyzes the effect of employee recognition, pay, and benefits on job satisfaction. In this cross-sectional study, survey responses from university students in the U.S. (n = 457), Malaysia (n = 347) and Vietnam (n = 391) were analyzed. Employee recognition, pay, and benefits were found to have a significant impact on job satisfaction, regardless of home country income level (high, middle or low income) and culture (collectivist or individualist). However, the effect of benefits on job satisfaction was significantly more important for U.S. respondents than for respondents from Malaysia and Vietnam. The authors conclude that both financial and nonfinancial rewards have a role in influencing job satisfaction, which ultimately impacts employee performance. Theoretical and practical implications for developing effective recruitment and retention policies for employees are also discussed. Key words: HR practices; employee recognition; pay; benefits; job satisfaction; culture; Vietnam; Malaysia; USA JEL code: M12 1. Introduction No resource is more critical to an organization’s success than its human resources are (DeNisi & Griffin, 2008，p. 5); people are the only strategic weapon a company has that cannot be copied by its competition (DeCenzo & Robbins, 2010, p. 4). Employees who are competent, motivated and satisfied lead to more productive organizations overall (Baron & Kreps, 1999; Caligiuri, Lepak, & Bonache, 2010; Pfeffer, 1994). Satisfied employees are more likely to be committed to their organizations and exhibit higher levels of performance and productivity (e.g., Steinhaus & Perry, 1996; Cranny, Smith, & Stone, 1992; Weiss, 2002). Employee’s job satisfaction offers important clues concerning the health and performance of an organization and provides information on where improvements can be made to the organization. Considerable research has been conducted to assess the impact of different types of rewards on job satisfaction. While pay and benefits are common financial incentives, employee recognition, can be derived from both financial and nonfinancial rewards (DeCenzo & Robbins, 2010). Yet, previous research has given little Mussie T. Tessema, Ph.D., Associate Professor of Management, Department of Business Administration, Winona State University; research areas: HRD, HR management; E-mail: mtessema@winona.edu. Kathryn J. Ready, Ph.D., Professor of Management and Chair, Department of Business Administration, Winona State University; research areas: strategic management and HR management; E-mail: kready@winona.edu. Abel B. Embaye, Ph.D., Assistant Professor of Economics, Department of Economics, University of Arkansas; research areas: public finance, labor economics; E-mail: aembaye@walton.uark.edu.