Making Justice Sense of Local-Expatriate Compensation Disparity: Mitigation by Local Referents, Ideological Explanations, and Interpersonal Sensitivity in China-Foreign Joint Ventures

Hong Kong University of Science & Technology Business School Research Paper

Academy of Management Journal, Vol. 45, No. 4, pp. 807-817, 2002

12 Pages Posted: 3 Aug 2007

See all articles by Chao C. Chen

Chao C. Chen

Rutgers, The State University of New Jersey - Management & Global Business

Jaepil Choi

Hong Kong University of Science & Technology

Shu-Cheng Chi

National Taiwan University - Department of Business Administration

Abstract

We examined how local employees of international joint ventures (IJVs) perceived disparity between their compensation and foreign expatriates' compensation from equity theory and social justice perspectives. Chinese locals perceived less fairness when comparing their compensation with expatriates' than when comparing it with other locals'. However, fairness vis-a-vis expatriates increased if the locals were compensated higher than their peers in other IJVs or endorsed ideological explanations for expatriates' advantage. Furthermore, expatriates' interpersonal sensitivity toward locals reduced the effect of disparity on perceived fairness. Finally, perceived compensation fairness was related positively to compensation satisfaction but negatively to intentions to quit.

Suggested Citation

Chen, Chao C. and Choi, Jaepil and Chi, Shu-Cheng, Making Justice Sense of Local-Expatriate Compensation Disparity: Mitigation by Local Referents, Ideological Explanations, and Interpersonal Sensitivity in China-Foreign Joint Ventures. Hong Kong University of Science & Technology Business School Research Paper, Academy of Management Journal, Vol. 45, No. 4, pp. 807-817, 2002, Available at SSRN: https://ssrn.com/abstract=1004686

Chao C. Chen (Contact Author)

Rutgers, The State University of New Jersey - Management & Global Business ( email )

Newark, NJ
United States
973-353-5425 (Phone)
973-353-1664 (Fax)

Jaepil Choi

Hong Kong University of Science & Technology ( email )

Organizational Behavior
Clear Water Bay, Kowloon
Hong Kong

Shu-Cheng Chi

National Taiwan University - Department of Business Administration ( email )

No. 1, Sec. 4, Roosevelt Rd.
Taipei
Taiwan
+886 2 236 3 0231 Ext. 2942 (Phone)
+886 2 236 8 9305 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
226
Abstract Views
1,761
rank
157,814
PlumX Metrics