Societal Inequality, Corruption and Relation-Based Inequality in Organizations

Abstract

Our paper contributes to emerging management research on the effects of societal inequality. It aims to study the relationship between societal-level inequality and perceived unequal HR practices within organizations based on relationships which we term “relation-based inequality” (RBI). We further examine the moderating effect of country corruption on the RBI-employee commitment link. Thus, whereas previous research has looked at single countries, there is still much to know about societal effects of inequality and corruption on employee perceptions and attitudes at work across countries. By surveying 691employees from five countries and using country-level indicators we take a first step in this direction, and establish that inequality (income, health and education) is linked to higher levels of relation-based HR practices. We also show that the effect of RBI is different for continuance, affective and normative commitment, and contingent on country corruption levels.