Equity, equality and need as determinants of pay allocations

Abstract

Involves a role‐play in which Chinese and US managers allocate a hypothetical bonus to a work group. Indicates that Chinese managers employed three distributive rules (i.e. equity, equality and need) placing greatest emphasis on equality. In contrast, US managers employed two distributive rules, equity and equality, placing the greatest emphasis on equity. Chinese managers placed significantly greater emphasis on the need rule than did US managers, although very small amounts were allocated on the basis of need. Discusses implications for appropriate pay design.