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 t...