Personality and national culture: Predictors of compensation strategy preferences in the United States of America and India

Abstract

Purpose - The purpose of this paper is to examine the relationships between individual personality and compensation package preferences and whether cross-cultural differences exist in these preferences in the USA and India. Design/methodology/approach - A survey methodology was used and subjects included 175 MBA students of two universities, one in the USA and one in India. Measurement instruments included a Big Five personality measure and a compensation pay strategy typology. Findings - Results indicated a significantly different pattern of results between subjects in the two countries. In the India sample, introversion was a significant predictor of a security/commitment pay strategy and extroversion and neuroticism were significant predictors of performance-driven pay strategies. In the US sample, none of the personality variables was predictive of pay strategy preferences. Practical implications - Multinational firms should reconsider "one-size-fits-all" compensation plans and tailor strategies to fit the profile of their workforce. Originality/value - The paper provides empirical data indicating that relationships exist between personality and pay package preferences, and that these relationships differ by culture. © Emerald Group Publishing Limited.