How Do Organizations Allocate Rewards? The Predictive Validity of National Values, Economic and Organizational Factors Across Six Nations

Abstract

Differences in the reported use of reward allocation principles based on equity, equality, and need in work organizations in Germany, United Kingdom, New Zealand, the United States, and Brazil are investigated. Organization-level and nation-level predictors are used to explain reported differences. Organizational, macroeconomic, and Schwartz's nation-level value indices are all found to be significant predictors. Reliance on equity is predicted by organization-level variables and high nation-level mastery. Reliance on equality is only influenced by organization-level variables. Reliance on need is predicted by the unemployment rate and high nation-level embeddedness. The results indicate that reward allocation studies that focus solely on individual-level factors will fail to detect important sources of variance. The need to consider multiple levels of explanation in cross-cultural research is discussed.