The relationships of distributive justice and compensation system fairness to employee attitudes in international joint ventures

Abstract

AbstractEmployee perceptions of the fairness of general corporate systems have thus far not received enough attention in the organizational justice literature. To fill this gap, we examined perceptions of the fairness of the compensation systems of international joint ventures in China. It is argued that perceptions of compensation system fairness are positively related to the three distributive justice dimensions, i.e., performance‐based distributive justice, comparative distributive justice relative to foreign expatriates, and comparative distributive justice relative to local colleagues. Perceptions of compensation system fairness are also hypothesized to mediate the relationships between the three distributive justice dimensions and organizational commitment and turnover intention. A survey of 161 Chinese employees in Sino‐foreign joint ventures found a positive relationship between perceptions of distributive justice and perceptions of compensation system fairness. In particular, compensation system fairness was more strongly associated with performance‐based distributive justice than with the other two distributive justice dimensions based on social comparison. The mediating role of compensation system fairness was strongly supported. Copyright © 2007 John Wiley & Sons, Ltd.