Abstract:
Background and Aim:
Skills shortages in international organisations are commonly remedied with the use of
expatriates. These expatriates are well paid for their expertise as well as for relocation
“inconvenience”. However, it has become widely known internationally that expatriates
receive far more attractive remuneration than their Host Country National (HCN)
colleagues (local employees). The need for this study was formed on the basis of the
HCN’s perception of this disparity and whether it could have a negative effect on his / her
job attitudes.
The main purpose of the research study described herein is to investigate the relationship
between the expatriate-HCN pay differential in perspective of the HCN’s perceptions of
pay unfairness, and the impact thereof on the organisation commitment and job
satisfaction of HCN’s. More specifically this research aimed at determining whether there
is (1) a HCN-Perceived Compensation Disparity (HPCD) between (HCNs) and expatriates,
whether there is (2) a relationship between HPCD and the HCN’s Organisational
Commitment (OC), and whether there is (3) a relationship between HPCD and the HCN’s
Job Satisfaction (JS).
Method:
A cross-sectional survey design was used, with a purposive sample (N = 86) taken from
organisations across several industrial sectors in South Africa. A single-item scale for
HPCD, the Minnesota Satisfaction Questionnaire (MSQ) and Organisational Commitment
Questionnaire (OCQ) were administered to professional and skilled Host Country
Nationals (HCNs) of South Africa, working on a same or similar hierarchal level as
expatriates. Descriptive statistics, data analysis and hypothesis testing were performed
using Statistical Package for the Social Sciences (SPSS) software, outputting frequency
tables, mean, standard deviation, Cronbach’s alpha coefficients (testing for reliability) and
Pearson correlation coefficients to investigate relationships.
Results:
Results showed existence of an HPCD (Host Country National Perceived Compensation
Difference). No significant relationship was observed between the HPCD and
Organisational Commitment (OC) (r(df = 86; p = 0.243) = -0. 129). A practically significant
negative correlation (medium effect) was observed between HPCD and Job Satisfaction
(JS), (r(df = 86; p = 0.002) = -0.336). These results were supported by the findings from a
literature review, with the exception of the lack of statistical significance in the HPCD and
OC relationship.
Practical Relevance:
Interpretations from all the results were made and future theoretical and practical
recommendations to the HRM industry are proposed. This research provides valuable
insight into the South African context, filling a literature gap in this area and provides
knowledge with regards to the applicability of the equity theory and social comparison
theory in the workplace.
