Host Country National Reactions to Expatriate Pay Policies: a Model and Implications

Abstract

We examine the referent selection process of host country national (HCN) employees. We outline the conditions under which they are more likely to select expatriate colleagues as comparative referents and suggest that, when this occurs, they are likely to experience relative deprivation. We also highlight the role of national culture in the process. Our model shifts the focus of overseas assignments research from the expatriate to the HCN, and it also has important practical implications for multinational enterprises sending employees overseas.