The Relationship between perceived compensation, organizational commitment and job satisfaction: the case of Mexican Workers in the Korean Maquiladoras

Abstract

Expatriate literature has generally favoured home country factors to understand expatriate success. In this paper, we contribute to the field by shifting our focus to the host country workforce (HCW). We use equity theory to examine the effects of perception gaps in compensation between HCW and expatriates on organizational commitment and its impact on job satisfaction and job performance. Based on field surveys and in-depth interviews of Korean expatriates as well as Mexican workers, results provide support for our hypothesis that significant perception gaps exist in compensation. The finding that compensation gap was significantly related to affective commitment only is of crucial importance. Our results also suggest that only affective commitment is positively related to job satisfaction and performance. We discuss research as well as managerial implications.