Cross-cultural Differences in Compensation Level and Inequality across Occupations: A Set-theoretic Analysis

Abstract

Compensation level and compensation inequality, as central aspects of modern organizations, are vital for organization studies. Previous research has investigated various aspects of compensation systems, but few studies have taken a cross-cultural perspective. I address this need for cross-cultural research by studying compensation and culture utilizing a configurational approach, investigating combinations of cultural and macro-environmental attributes associated with differences in compensation level and compensation inequality. I apply fuzzy set Qualitative Comparative Analysis (fsQCA) to analyze country-level data encompassing four occupational groups (cleaners, secretaries, mid-level managers, and senior managers) from 44 countries. Findings show configurations of cultural dimensions, development, and welfare state that are sufficient for high compensation level and compensation inequality among these four occupations. Implications for future cross-cultural research on compensation are discussed.