Understanding locals' compensation fairness vis-à-vis foreign expatriates: the role of perceived equity

Effects of Perceived Internal Equity of Rewards on Job Satisfaction: A Case of Host Country Workers of International Non-Governmental Organizations in Nairobi

“…This therefore agrees with the study by Chen, Kraemer and Gathii (2011) which found that compensation disparity versus expatriates negatively affects locals' perceived compensation fairness. This perception of internal inequity can be construed to mean a bleach of the psychological contract on the part of the employers.…”

“…Chen, Kraemer and Gathii (2011) found that improving the perception of compensation advantage of local staff vis-à-vis other reference group (local staff) had the ability to improve the perception of fairness vis-à-vis expatriates. So this observation shows that the perception of internal equity of rewards has been mediated by the perception of compensation advantage as compared to other local colleagues working for the same organizations.…”

Moving from the developing to the developed: compensation disparities of Chinese expatriates

“…Prior research has established distinctions between comparison‐based and equity‐based distributive justice (Leung, Wang and Smith ). Different from comparison‐based distributive justice, which focuses on the comparison with the other individuals or social groups, equity‐based distributive justice uses the company as a referent and makes the assessment of one's contribution explicit (Chen, Kraemer and Gathii ). It means that an employee assesses justice based on whether their compensation is equitable given his/her perceived inputs (responsibility, performance, effort, experience, and pressure).…”

“…Previous studies have shown that organizational justice is linked to work and organizational attitudes (Ambrose, Hess and Ganesan ; Rock and Shanock ). In particular, research on host‐country employees’ compensation disparity demonstrates that locals’ perceived distributive justice has a significant impact on job satisfaction (Chen, Kraemer and Gathii ; Leung, Wang and Smith ). In this study, although our focus is not host‐country employees, Chinese expatriates working in a developed country resemble the local country employees studied in prior literature in that they are also in a relatively disadvantaged position.…”

The moral challenge of expatriate employment in developing countries

“…Four main arguments have been put forward to explain the moral problem of expatriate employment in developing countries, namely that the practice: 1) is premised on the injustice of wage discrimination (Toh & DeNisi 2005;Chen, Kraemer, and Gathii 2011;Oltra, Bonache, and Brewster 2013;Bonache, Sanchez, and Zarraga-Oberty 2009), 2) produces undesirable outcomes (Carr, McLoughlin, Hodgson, and MacLachlan 1996), 3) disregards contextual aspirations and historical memory (Bhanugopan & Fish 2007;Akinsanya 1980Akinsanya , 1994Ogbuagu 1983;Rood 1976) and 4) perpetuates external domination and control (Smiley 2010;Manji & O'Coill 2002).…”