Rewards-Allocation Preferences of Chinese Employees in the New Millennium: The Effects of Ownership Reform, Collectivism, and Goal Priority

The ownership restructuring of Chinese state-owned enterprises, launched in 1992, has been one of the most radical and far-reaching market-oriented reforms in the Chinese economy. We studied the effects of ownership reform and individuals' collectivist values on rewards-allocation preferences of employees in Chinese state-owned enterprises, and how these relationships were mediated by employees' productivity goal orientation. We predicted the effects of ownership reform and collectivism on rewards-allocation preferences based on the model of allocation goal priority and the conceptual distinctions of vertical and horizontal collectivism. With data from four pairs of public state-owned enterprises (i.e., listed on the stock market) versus pure state-owned enterprises, we found the following results. First, employees of enterprises that had experienced a greater degree of ownership reform expressed stronger preferences for differential allocation rules (e.g., job position and performance) but weaker preferences for equalitarian allocation rules (e.g., group and individual equality). Second, vertical collectivism was positively related to preferences for differential allocation rules, but horizontal collectivism was positively related to preferences for equalitarian allocation rules. Third, the effects of both ownership reform and vertical collectivism on differential allocation preferences were mediated by productivity goal orientation. Research and practical implications for ownership reform and vertical-horizontal collectivism are discussed.