The cultural difference in equity norm preference and the effects of pay-for-performance perception on job attitudes

Abstract

Understanding cross-cultural differences in reward allocation which influences both job attitudes and motivation of employees is crucial for effective international management. In the current research, we examined whether there exists a difference in preference for equity norm across three countries and further explored the relationship between pay-for-performance perception and job attitudes of employees such as pay satisfaction and turnover intention. Host country nationals working at a Korean global company’s oversea subsidiaries located in one of the United States, China, and Japan completed survey, and the results are as following: First, American preferred equity norm the most, followed by Chinese and Japanese employees while there was no significant difference between American and Chinese but Japanese. Second, in case of employees working in either the U.S. or China, there existed a negative relationship between pay-for-performance perception and turnover intention, and a positive relationship between pay-for-performance perception and pay satisfaction. On the other hand, in case of Japanese employees, there was no relationship between pay-for-performance perception and turnover intention, and a negative relationship between pay-for-performance perception and pay satisfaction. Discussion, implications and limitations of the current research are followed.