2. Money Ethic Scale Part 2

3. Four Money Profiles Money Repeller (The Most --) Apathetic Money Handler Careless Money Admirer Achieving Money Worshiper (The Most +)

5. Four Money Profiles Negative Indifferent Positive _____________________________________ Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper 82 50 62 117 26.37% 16.08% 19.83% 37.62%

6. Partitioning--Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler AdmirerWorshiper ___________________________________ 26.37% 16.08% 19.83% 37.62% W 24.41% 9.57% 20.57% 45.45% US 30.39% 27.45% 15.69% 26.47% S USA, Spain

7. Interpretation--Money Profiles F Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ F Success 1.77 1.96 3.53 (3.52) F Budget 3.84 3.75 (2.85) (4.29) F Motivator 3.60 (2.35) 3.72 (3.95) F Equity 3.04 3.62 3.34 (3.77) F Evil (3.01) 2.34 2.99 2.77

8. Validation--Money Profiles F Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ F Age 39.38 42.12 40.49 46.49 F Income 31,600 37,990 34,640 50,903 F Experience 13.85 17.83 15.48 21.55 F No. Jobs.93.67* 1.15 1.33* F *p =.074

9. Validation-Money Profiles F Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ F PWE 3.25 3.27 3.48 3.56 F Intrinsic 4.19 4.35 4.00 4.22 F Extrinsic 3.06 3.15 3.23 3.36 F Pay 3.07 2.90 2.83 3.29 F Benefits 3.23 3.22 3.13 3.45 F Raise 2.79 2.56 2.68 2.82 F Adm. 2.49 2.47 2.58 2.81

10. Validation-Money Profiles F Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ F Equity Comparison F Dept. 3.15 3.10 3.14 3.29 F Org. 2.64 2.43 2.61 3.05 F Other Org. 2.57 2.33 2.56 2.81 F Market 2.49 2.35 2.67 2.71 F Life 4.17 4.38 3.81 4.27

11. Validation-Discriminant 1: Achieving Money Worshipers vs. Other Three Clusters. 2: Careless Money Admirers vs. Apathetic Money Handlers, Achieving Money Worshipers. 3: Money Repellers vs. Careless Money Admirers, Apathetic Money Handlers.

12. Achieving Money Worshiper High: Income, Work Ethic, Pay Administration, Equity in Organization, and in Other Organizations, Low: Intrinsic Job Satisfaction, Labor Market

13. Profiling--Money Repeller The Highest--Factor Evil The Lowest--Income, Work Experience, Age, The Lowest--PWE, Pay Administration Sour Grapes, Sour Losers

14. Apathetic Money Handler The Lowest--Factors Motivator and Evil The Highest--Intrinsic, Life Satisfaction, Insufficient Justification Effect The Lowest--Organization Simplicity Movement (McNichol, 1998; Simple abundance, Your money or your life) Simplify. Waste not, want not.

15. Careless Money Admirer The Lowest--Factor Budget The Highest--Factor Success The Lowest--Intrinsic, Pay, Life Satisfaction Admirer Money, No Money, Not Happy. Money is a Motivator. Pressure/Opportunity, Unethical Behavior?

16. Achieving Money Worshiper The Highest-- Factors Success, Budget, Motivator, and Equity The Highest--Income, Age, Experience, Work Ethic, Pay, Organization Equity More Money in Industry, Happy Financially

17. Implications-1 Four Money Profiles Individual Differences Demographic Variables B = f (P x E) Attitudes May Change Due to Age, Income, and the Socialization Process

18. Implications-2 Money is NOT a Motivator for everyone. Different approaches to Attract, Retain, and Motivate people P-E Fit

19. Money Profiles--Macedonia Republic of Macedonia is situated in the southern part of the Balkan Peninsula covers an area of 25,713 square kilometers with a population of more than 2 million people. Skopje is the capital with a population of 650,000. Tang, Tillery, Lazarevski, & Luna-Arocas (2000)

20. Macedonian Sample 1. Full-time sophomores at College of Management, Kiril and Methodi University (n = 30, return rate = 96.6%) Live with their parents, not working 2. Small business owners and employees in large organizations (n = 60, return rate = 100%). 48 Males, 41 Females

21. Measures 15-Item Money Ethic Scale 24-Item Locus of Control (Levenson, 1973) The work and family orientation questionnaire (Helmreich & Spence, 1978): Work Persistence, Active Involvement, Competitiveness, Success Avoidance

22. Partitioning: Macedonia Order of Money Factors ANOVAs EvilF = 55.28*** SuccessF = 48.41*** BudgetF = 28.81*** Motivator F = 24.77*** EquityF = 1.13 The F tests should be used only for descriptive purposes.

23. Four Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper 26 14 19 30 29.21% 15.73% 21.35% 33.71% USA + Spain: 26.37% 16.08% 19.83% 37.62%

24. Partitioning--Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper 29.21% 15.73% 21.35% 33.71% W 53.57% 32.14% 3.57% 10.71% S 18.33% 6.67% 30.00% 45.00% E S = Students, E = Employees

25. Interpretation--Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ Evil (14.77) 10.36 7.74 7.67 Success 7.19 (3.93 ) 9.16 (9.17) Budget 13.00 12.43 (9.89) (17.10) Motivator 8.15 (6.79) 9.68 (9.80) Equity 11.84 11.43 11.11 11.13

26. Validation--Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ Age 26.31 24.71 29.53 33.07 Experience 14.64 13.50 9.28 12.30 Education 14.41 14.64 13.58 14.67 Status* 1.42 1.31 1.95 1.90 *Students =1, Employees =2

27. Validation-Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ LOC-E 82.62 77.36 95.00 94.10 Persist 12.23 11.64 11.95 12.77 Involve 13.88 12.14 16.63 16.57 Compete 6.58 6.57 7.58 8.17 Avoid 6.35 5.00 3.89 4.33 Life 4.17 4.38 3.81 4.27

28. Validation-Discriminant 1: Achieving Money Worshipers, Careless Money Admirers vs. Apathetic Money Handlers, Money Repellers. 2: Apathetic Money Handlers vs. Money Repellers. 3: Careless Money Admirers vs. Achieving Money Worshipers.

29. Discriminant Achieving Money Worshipers + Careless Money Admirers consider money as their Success and a Motivator and do not consider it as Evil than Apathetic Money Handlers + Money Repellers. Achieving Money Worshipers Budget their money more carefully than Careless Money Admirers.

30. Classification Results 95.1% of Original grouped cases correctly classified. 82.7 of cross-validated grouped cases correctly classified. In cross validation, each case is classified by the functions derived from all cases other than that case.

31. Money Profiles--Students, the USA Two Regional State Universities, Military Base N = 564, return rate = 72.9% 184 Males, 360 Females 441 Caucasian, 52 African-American, 6 Hispanic, 14 Asian, 3 American Indian Job tenure = 26.14 months Income = US$9,260 (64.4%) Tang, Tang, & Luna-Arocas

32. Measures 30-Item Money Ethic Scale (Tang, 1992) 10-Item Organization-Based Self-Esteem (OBSE) (Pierce, Gardner, Cummings, & Dunham, 1989) 20-Item Minnesota Satisfaction Questionnaire (Weiss, Dawis, England, & Lofquist, 1967). 13-Item, Modified Need Satisfaction Questionnaire (NSQ) (Porter, 1961, 1961). (Tang & West, 1997; Tang & Ibrahim, 1998) Importance and Satisfaction of Maslow’s Needs

33. Partitioning: Order of Money Factors ANOVAs GoodF = 377.97*** RespectF = 168.10*** AchievementF = 162.08*** Power F = 161.14*** BudgetF = 37.45*** EvilF = 6.02*** The F tests should be used only for descriptive purposes.

34. Partitioning--Four Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper 85 170 165 127 15.54% 31.08% 30.16% 23.22%

35. Interpretation--Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ Good 25.93 37.75 35.05 (41.57) Respect 9.34 (8.26) 11.84 (14.80) Achievement 8.89 (8.22) 10.75 (14.74) Power 10.61 12.46 14.48 (17.51) Budget 8.86 11.37 (8.81) 11.09 Evil (16.08) 14.46 14.42 16.06

36. Validation--Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ Age 23.33 23.91 23.19 23.24 Experience 28.29 19.11 31.75 29.92 Education 14.43 14.77 14.44 14.98 Income 6,432.38 9,192.48 9,433.13 11,071.17

37. Validation-Money Profiles Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ OBSE 33.71 40.43 38.39 40.81 PWE 13.08 15.00 14.48 16.11 MSQ-Int 39.39 44.05 43.01 46.23 MSQ-Ext 18.00 19.27 19.09 21.53

38. Validation-Importance of Needs Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ Physiological 3.31 3.60 3.64 3.88 Safety 3.45 3.79 3.83 4.01 Social 3.69 4.01 3.93 3.96 Self-Esteem 3.39 3.88 3.77 4.07 Actual 3.51 4.12 3.88 4.12

39. Validation-Satisfaction of Needs Money Apathetic Careless Achieving Repeller Money Money Money Handler Admirer Worshiper _______________________________________________ Physiological 3.76 (4.19)* 4.01 4.14 Safety 3.38 (4.07)* 3.87 4.02 Social 3.24 3.70 3.74 (3.86)* Self-Esteem 3.09 3.30 3.42 3.43 Actual 3.12 3.33 3.42 (3.57)* Money attitudes are related to the satisfaction of lower- or higher-order needs.

40. Validation-Discriminant 1: Achieving Money Worshipers vs. Money Repellers. 2: Money Repellers vs. Apathetic Money Handlers. 3: Careless Money Admirers vs. Achieving Money Worshipers, Money Repellers.

41. Classification Results 91.57of Original grouped cases correctly classified.

42. Conclusion We can consistently classify people into 4 clusters (Achieving Money Worshipers, Careless Money Admirers, Apathetic Money Handlers, and Money Repellers) based on the Money Ethic Scale (30-item MES, or 15-item MES), across several cultures (Macedonia, Spain, and USA). Future research should test this Model in different occupations and cultures.

43. Tang, Kim, & Tang (2000) Tang, T. L. P., Kim, J. K., & Tang, D. S. H. (2000). Does attitude toward money moderate the relationship between intrinsic job satisfaction and voluntary turnover? Human Relations, 53 (2), 213-245.

44. Money Ethic and Voluntary Turnover Voluntary turnover: Higher wages/career opportunity (Campion, 1991). Leavers receive 20% increase in pay. Unemployment rate and financial requirements moderate the relationship between job satisfaction and voluntary turnover (Gerhart, 1990)

45. Push and Pull Dissatisfaction may push the employee to look for alternative employment, whereas the perception of attractive alternative job opportunities may pull them to consider alternative employment (March & Simon, 1958) The more specific the intention measure and the closer the person is to actually quitting, the more trivial the prediction (Mobley, Griffeth, Hand, & Meglino, 1979, p. 508).

46. Moderator Dependent variable y (withdraw cognitions, turnover) is a function of x (intrinsic job satisfaction) and z (Money Ethic). Moderator The Interaction Effect is significant. (James & Brett, 1984)

47. Money Ethic, Satisfaction, and Turnover Time 1: 40 Agencies (275 Employees, Mental Health & Mental Retardation) Data: 155 Employees (32 Agencies) Return Rate: 56.36% Time 2: 112 Employees (18 months later) Data: 84 Employees, Return Rate: 75% 62 Stayers, 20 Leavers, 2 Fired (excluded)

48. Withdrawal Cognitions (y) Hierarchical Multiple Regression Status (Manager, Adm., Direct Care) Perceived Alternative Employment Opportunity (PAEO) Commitment* MSQ-Ext* MSQ-Int (A) (x) Money Ethic (MES) (B) (z) MES x MSQ-Int* (A x B) (x. z)

49. High MES Low MES LowHigh Intrinsic Job Satisfaction Withdrawal Cognitions

50. Logistic Regression Status PAEO Commitment* Withdrawal Cognitions (ns) MSQ-Ext MSQ-Int* (A) MES* (B) MES x MSQ-Int* (A x B) Concordant = 80.8%

51. High MES Low MES Low High Intrinsic Job Satisfaction Turnover

52. Mediator x -----> m -----> y Antecedent Mediator Consequence Satisfaction Money Ethic Turnover 1. x ----> m 2. x ----> y 3. m ----> y All are true, then, x on y must be less in 3 than in 2. (Baron & Kenny, 1986)

53. Money Ethic as a Mediator 1. Intrinsic Job Satisfaction ----> Money Ethic, t = 2.919, p =.005 2. Intrinsic Job Satisfaction --x--> Turnover 3. Intrinsic Job Satisfaction + Money Ethic --x--> Turnover Money Ethic is not a mediator between intrinsic job satisfaction and turnover. Money Ethic is not a mediator between withdrawal cognitions and turnover.

54. The Matthew Effect & The Pay Differential Tang (1996) Journal of Economic Psychology Tang, T. L. P., Furnham, A., & Davis, G. M. T. W. (in press). A cross cultural comparison of pay differentials as a function of rater’s sex and money ethic endorsement: The Matthew Effect revisited. Personality and Individual Differences.

55. The Matthew Effect Gabris and Mitchell (1988): Apostle Matthew in the bible (13:12) For to him who has shall be given, and he shall have abundance; but from him who does not have, even that which he has shall be taken away (Matthew 13: 12).

56. The Matthew Effect According to the Matthew Effect, merit increases are frequent and plentiful for good performers. But, poor to average performers suffer because money is taken from them to pay large merit increases to the good performers (p. 55). Heneman, Robert L. (1992). Merit pay.

57. Sex and Money Equity (Merit) Vs. Egalitarian (Equality) Women rate social needs higher than do men (Lawler, 1971). Males, white-collar employees, high performers, achievement-oriented employees and those who already work under a merit plan tend to favor merit pay (Heneman, 1992).

58. Pay Differential The pay differential, irrespective of job content or function, is defined as the salary at one level divided by the salary at the next lower level. Pay differential is a reflection of the relative worth of these positions to the organization and is not related to the job incumbents (Mahoney, 1979; Simon, 1957).

59. Pay Differential--In History Plato sated in The Laws that society was strongest when the pay differential for income between the richest and the poorest was 4:1. Aristotle favored a 5:1 ratio.

60. Pay Differential in 1970s Mahoney (1979) No. 1/No. 2 = 1.37 to 1.41 No. 2/No. 3 = 1.21 to 1.23

61. Pay Differential in 1990s! Hausman (1996): No. 1/No. 2 19911.70 19921.63 19931.77 19941.70 and 19951.93 (~ 2.00).

62. Pay Differential (Average CEO) Year CEO Worker ratio 1960 190,383 4,666 41 1970 548,787 6,933 79 1980 624,996 15,008 42 1992 3,842,247 24,411 157.

63. Pay Differential (Average CEO) Year CEOWorkerRatio 1993 3,841,273 25,317152 1994 2,880,975 26,388109 1995 3,746,392 26,652141 1996 5,781,300 27,662209 1997 7,804,755 28,381275.

64. Pay Differential (Highest Paid CEO) Year Highest CEO Worker Ratio 1991 58,999,000 18,462 3,190 1992 127,000,000 24,411 5,203 1993 203,010,590 25,317 8,019 1994 25,928,000 26,388 983 1995 65,580,000 26,652 2,461 1996 102,449,000 27,662 3,704 1997 230,725,000 28,381 8,130 1998 575,592,000 30,000 19,180 & This is different from the 4:1 or 5:1 ratio.

65. Pay Differential USA150 Japan 15 Europe 20 Nelsen-Horchler (Industrial Week, 1990, 1991)

66. Method Organization Chart Hypothetical Organization Chart Mahoney (1969) C (CEO) = A b L-1 See Example (next slide)

67. Organization Chart 20,000 A B C DEF C (CEO) = A b L-1

68. Tang (1996) Men with high Money Ethic endorsement allocated significantly more money to the highest position and less money to the lowest position (creating a large pay differential) than did those with low MES. Women’s allocations of money were not affected by their endorsement of the MES.

69. Top/Bottom Pay Differentials Sex x Money: F (2, 157) = 3.04, p =.051 Sex Groups F-Employee F-Student M-Student High MES 2.202.792.96* Low MES 2.422.532.04* *p <.05.

70. Pay Differential Taiwan, USA, UK Taiwan: 78 Professionals The USA: 137 Professionals The UK: 93 Professionals The 12-Item Money Ethic Scale

71. The Matthew Effect F Taiwan USA UK F Sex F M F M F M High 2.63 2.77 2.20 2.83 2.56 2.39 Low 2.05 2.07 2.35 2.38 2.71 2.15 F The Whole Sample F Sex F M High MES 2.43 2.67* Low MES 2.36 2.18*

72. Culture Collectivist cultures value strong, cohesive in-groups (i.e., equality), whereas individualistic societies emphasize individual freedom and the immediate family (i.e., equity). Individualism: USA (1), UK (3), Taiwan (44) Masculinity: UK (9/10), USA (15), Taiwan (32/33). (Hofstede & Bond, 1988).

73. Confucianism Man’s interactions with his fellow humans (Rhody & Tang, 1995). The junior partner owes the senior respect and obedience. The senior owes the junior partner protection and consideration (Hofstede & Bond, 1988).

74. Organization Chart 20,000 A B C DEF C (CEO) = A b L-1

75. Results F MANOVA F = 2.78*** F Taiwan USA UK A 35,526 34,658 31,608 1>2>3 C 19,754 19,326 19,007 D 15,421 14,742 13,920 1>2>3 E 15,280 14,698 13,768 1>2>3 F 15,473 14,663 13,673 1>2>3.

76. Pay Differential F MANOVA F = 3.31*** F Taiwan USA UK A/20000 1.77 1.73 1.58 1>2>3 C/20000.99.97.95 20000/D 1.34 1.40 1.49 1<2<3 20000/E 1.37 1.41 1.51 1<2<3 20000/F 1.34 1.41 1.43 1<2<3.

77. Pay Differential--PRC Tang, T. L. P., Luk, V., & Chiu, R. K. (2000, C&BR). Pay differentials in People’s Republic of China: An examination of internal equity and external competitiveness.

78. Compa Ratio Compa ratio is usually defined as the ratio of actual pay to structure midpoint, or, the ratio of actual pay to competitive pay. In this study, we compare pay differentials within organizational structure (vertical) and across organizations.

79. Higher Education In 1950, 43% of high school students in the USA pursued higher education, 6% of Americans were college graduates. In 1992, 66% of high school students went to college, and 21% of a larger American population had college degrees. Some 17 million students are attending classes taught by 762,000 professors on 3,400 campuses in the US (Elfin, 1992; Tang & Chamberlain, 1997).

80. Education and Pay In 1963, College graduates 8.45/hr High School graduates 6.10/hr Ratio = 8.45/6.10 = 1.39 In 1990, College graduates 10.25/hr High School graduates 6.82/hr Ratio = 10.25/6.82 = 1.50

81. College Tuition Tang, T. L. P., Tang, D. S. H., & Tang, C. S. Y. (2000). College tuition and perceptions of quality: Private colleges and universities. Paper submitted for publication. Academic reputation ranking is the most significant predictor of college tuition. Investment

82. Reputation Kent Tool, IH: If you are looking for the best people, one way to be sure of finding them is to let someone else do the screening for you (Friedrich, 1981, Time). Judge, Cable, Boudreau, & Bretz (1995) studied 1,388 executives (9% Ivy League) and found that the predicted earning advantage for Ivy League graduates, over the course of a 20-year career, is more than $600,000 (p. 510).

83. Method 1998 China Pay Level Survey Sponsored by the Hong Kong Industrial Relations Association and Wing Lung Bank International Institute for Business Development of Hong Kong Baptist University

84. Research Data 19-page survey mailed to 200 companies in PRC 104 Companies (return rate = 52%) Covering 56,390 employees

85. Benchmark Job 63 Benchmark jobs: 4 Levels Managerial Staff (14 jobs) Supervisory/Technical Staff (21) General Staff (19) Operative Staff (19)

86. Region Beijing Shanghai Guangzhou Shenzhen and Zhuhai and Others

87. Business Sector Retail, food and beverage, professional services, sales and marketing, property management, telecommunication, computer and electronics, electrical and machinery, metal, industrial materials, construction, and others. Service (48) vs. Manufacturing (35)

88. Mode of Operation State-owned (SOEs, n = 5) and Privately-owned: Wholly-owned vs. Joint venture, cooperative venture, processing venture, representative office Wholly-owned (14) vs. Venture (84)

89. Company Size Less than 300 Employees (69) Between 300 to 1,000 (15) More than 1,000 (20)

90. Annual Salary Service vs. Manufacturing (RMB) A B Service Manuf. A/B Accounting Mgr. 52,476 80,387.65 QC Supervisor 39,528 26,798 1.47 Engineer 37,540 28,273 1.33 Security Guard12,133 8,689 1.40 Average 1.21.

91. Company Size A B C Small Median Large A/C B/C Clerk 16,969 15,024 11,742 1.45 1.28 Store 14,841 11,096 9,821 1.51 1.13

92. Mode of Operation F A B Wholly Venture A/B F Sales Mgr 13,500 68,184.20 F Purchasing Mgr84,499 53,068 1.59 Accountant42,871 31,786 1.35 F Systems Analyst30,144 43,463.69 F QC Technician21,772 14,257 1.53 F Average 1.07.

93. Levels of Education PRC Jr. Secondary 9 years of education Sr. Secondary (HS) 12 Diploma (HS + 2) 14 High Diploma(3 yr.) 15 University 16.

94. Starting Monthly Salary Service vs. Manufacturing F Engineering A B Service Manuf. A/B F Jr. Secondary (9 yr.) 626 371 1.69 Sr. Secondary(12) 947 686 1.38 Diploma (14)1,061 615 1.72 University (16)1,974 1,302 1.52 F A 1974/626 = 3.15 F B 1302/371 = 3.51 A/B =.90

95. Starting Monthly Salary Service vs. Manufacturing F Sales A B Service Manuf. A/B F Jr. Secondary 707 307 2.30 Sr. Secondary 997 725 1.38 Diploma1,077 765 1.41 F A 1077/707 = 1.52 F B 765/307 = 2.49 A/B =.61

96. Starting Monthly Salary Service vs. Manufacturing F Marketing A B Service Manuf. A/B F Jr. Secondary (9) 633 307 2.06 Sr. Secondary (12) 894 431 2.07 Diploma (14) 970 560 1.73 High Diploma(15)1,419 993 1.43 University (16)1,947 1,153 1.69 F A 1947/633 = 3.08 F B 1153/307 = 3.76 A/B =.82

97. Starting Monthly Salary Service vs. Manufacturing F Manufacturing A B Service Manuf. A/B F Jr. Secondary 610 364 1.68 Diploma 918 567 1.62 F A 918/610 = 1.50 F B 567/364 = 1.56 A/B =.96

98. Top-Bottom Pay Differential Annual Salary F Pay Dif F Administration 4.58 17.28 Information Tech. 3.41 F Accounting2.36 2.85 Marketing1.90

99. Top-Bottom Service vs. Manufacturing F A B Service Manuf. F Accounting Mgr/ 2.55 5.71 6.5* Entry University F A/B =.45

100. Starting Monthly Salary University/High Diploma F Field Pay Dif. t Engineering1.202.13* Sales1.17 F Information Tech. 1.192.41* Sales1.17

101. Conclusion There are significant pay differentials within organizations (internal equity) and across organizations (external competitiveness). Organizations may have employed different strategic compensation policies due to the nature of their operation and environmental variables.