The cultural influence on employees' preferences for reward allocation rules: A two‐wave survey study in 28 countries

Abstract

AbstractMultinational organisations and government organisations experienced problems introducing a merit pay system in different countries. Designing the right reward system is challenging in an international work environment, because employees often have different expectations about reward allocations. Most prior research predicted that individualistic employees prefer equity as allocation rule for rewards, while collectivistic employees prefer equality as allocation rule. However, prior research could not confirm this prediction. To expand prior research, we integrate cultural value theory and allocation rule research to examine if employees' culture‐inspired personal values influence their preferred allocation rule. We conducted a two‐wave study with 3432 employees from 28 countries. The results show that employees' cultural value orientations are related to their preferred allocation rules. Further, supervisors are not only considered fair if they distribute outcomes based on employees' task performance but also based on equality or extra‐role performance.