Employees’ Perception of Pay Equity: Study on Vietnam’s State-Owned Enterprises

Abstract

This article explores factors influencing the employee perceptions of pay equity during compensation reform in Vietnamese state-owned enterprises (SOEs) since economic reform (Doi moi) started. A qualitative approach by conducting 43 interviews from selected SOEs and the Vietnam government bodies was used to investigate a research question: What are the factors influencing employee perceptions of pay equity in Vietnamese SOEs? The findings show that in the case of the Vietnamese SOE reform, the perceptions are influenced by both SOEs’ compensation policies and practices and the national culture. This study extends the equity theory by adding new findings from the context of a transitional economy and a reforming process of the SOEs. The present case shows that national culture also greatly influences the perception of pay equity alongside compensation factors.