PERSON-BASED REWARD SYSTEMS - A THEORY OF ORGANIZATIONAL REWARD PRACTICES IN REFORM-COMMUNIST ORGANIZATIONS

A type of organizational reward system based on personal power is desc ribed and partially tested. The theory, developed from observations of Hungarian organizations, is grounded in theories of procedural justic e and learned helplessness. Person-based organizational reward systems are characterized by highly valued rewards combined with personalisti c criteria for reward distribution. Such organizational reward systems were hypothesized to lead to employee perceptions of organizational u nfairness; negative evaluations of others; anxiety; and perceptions of self, collegial and organizational inefficacy. These hypotheses were supported in tests in a sample of three Hungarian state-owned organiza tions classified as having person-based systems and five non-person-ba sed organizations (two Hungarian privately-owned companies, one Americ an state-owned and two American privately-owned organizations). In add ition, several behavioral effects of person-based reward systems were proposed: they foster bargaining behavior, withholding of information, avoidance of collaborative tasks, ingratiation and noncompliance with rules.