Collectivism and goal orientation as mediators of the effect of national identity on merit pay decisions

Individual learning and performance goal orientations and collectivism are investigated as mediators of the relationship between national identity and merit pay allocation decisions. In a scenario-based study, a total of 563 English-speaking participants (168 United States, 212 Singaporeans and 192 Indonesians) completed questionnaires and allocated merit pay bonuses ranging from 0 to 20 percent of base pay to four hypothetical high- and low-performing employees. General linear modelling was used to test the proposed mediational model. Results demonstrate that the effects of national identity on merit pay allocations are at least partially mediated by individual collectivism and goal orientations. Findings highlight the need for multinational organizations to be sensitive to differences in the orientations and values of employees across countries and to be cognizant of their role in merit pay decision making.