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Compensation disparity between locals and expatriates: Moderating the effects of perceived injustice in foreign multinationals in China

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  • Leung, Kwok
  • Zhu, Yongxin
  • Ge, Cungen

Abstract

A large compensation gap exists between local and expatriate employees in foreign multinationals in China. A survey in the Suzhou area confirmed that local employees regarded their compensation vis-à-vis that of expatriates as unfair. Trustworthiness of expatriates by locals showed a stronger effect on their evaluation of expatriates than on their job satisfaction and organizational commitment, whereas perceived compensation received by locals showed the opposite pattern. Trustworthiness of expatriates moderated the negative effect of perceived distributive injustice on evaluation of expatriates, whereas perceived compensation moderated the relationships between perceived distributive injustice and job satisfaction as well as organizational commitment.

Suggested Citation

  • Leung, Kwok & Zhu, Yongxin & Ge, Cungen, 2009. "Compensation disparity between locals and expatriates: Moderating the effects of perceived injustice in foreign multinationals in China," Journal of World Business, Elsevier, vol. 44(1), pages 85-93, January.
    • Handle: RePEc:eee:worbus:v:44:y:2009:i:1:p:85-93
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