Psychology

Reward allocation is a vital process of a manager-employee relationship. Through rewards, employees can be motivated or be discouraged in the work place. The Chinese, in particular, has a distinct reward allocation system wherein a categorization of employees determines the reward allocation. From the study entitled Reward allocation decision of Chinese managers Influence of employee categorization and allocation context, Hu, Hsu and Cheng provided a comprehensive discussion of the reward allocation of the Chinese. The categorization process, which is a distinguishable criteria on the Chinese reward allocation, is stated also in this study and will be further discussed on the proceeding parts of this essay.

Body
In the Chinese reward allocation system, employees are then categorized into three crtiteria relationship, loyalty and competence. These categories are used as determinants of the reward allocation process. First category is relationship. Relationship, based from the article, is defined as the relationship between the manager and the employee, whether by blood or through a close-knit relationship. A close relationship with the manager garners a higher rank while a distant relationship scores low. On the other hand, it is also vital for the Chinese to have loyalty to the manager and the organization. It is stated on the article that loyal behaviours include a strong sense of responsibility, making sacrifices for the leader, and complete identification with him or her. Loyalty is a vital category since it proves that the manager can trust the employee, which then leads to the opportunities and responsibilities that are given to the subordinate. Lastly, competence is defined as the high-quality human resource that is needed in the workplace. The quality of work and performance is the determinant of ones high or low competence.

From these categories, labels are created. These labels are proved to be vital in the reward allocation process as it affects the whole system of reward allocation. Those who rank high on the three categories, meaning, those who possess close relationship, high level of loyalty and high level of competence, are called insiders. On the other hand, those who have a distant relationship, low loyalty and lowly competent are called outsiders.

From the combinations of the three categories, three vital hypotheses are tested. One, managers give a higher reward percentage on the insiders compared to the outsiders. Insiders get higher rewards, higher support and higher tangible care from the managers. From the categories or criteria, relationship and loyalty are two of the categories that are perceives as vital, in the sense that positive management behaviours like trust, participation and information sharing are easily established. Opportunities are easily given to those that have a close relationship to the manager and those who are perceived to be loyal to the organization. In the same way, if the subordinate has a close relationship and is highly competent, they can also gain higher trust from the manager which can also affect the reward allocation. Leading to the next point, the three categories are a big determinant in reward allocation decisions. Hu, Hsu, and Chen stated that We expect that a subordinate who is loyal and competent will be most rewarded. That is, loyalty will affect reward allocation more strongly when subordinates are highly competent than incompetent. The last hypothesis tackles the reward allocation context, wherein reward allocation is affected if it is given privately or publicly. With all having the same number of hours on work, it was found out that those who ranked high in loyalty and competence were given higher rewards, proving the first hypothesis that was mentioned. With this, it was concluded that the concept of insiders or in-group does exist. It was also found out that among the three categories or criteria, competence was the most important on Chinese reward allocation. No matter whether the subordinate was close or distant, of high or low loyalty, as long as the employee was competent, the reward allocated was higher than the overall mean. The effect size of competence was also the highest among the three criteria. Basing from the second hypothesis, it was also found out that the three criteria affected the reward allocation decision of the managers. The context of reward allocation is also proved to have a great effect. Insiders are favoured more on the private context. Favouring the in-group subordinates decreases if it is in the public context. Categorization is not that highlighted publicly. Meanwhile, when the situation is in privatemeaning, when the issue of fairness and when the pressure of social evaluation is minimized, the three categories (relationship, loyalty and competence) work. The reward allocation system to insiders is highlighted more.

Conclusion
In summary, it can be concluded that the three hypotheses work and is distinguishable among the Chinese. Three vital categories namely relationship, loyalty and competence determine the reward allocation system. These categories also affect the reward allocation decisions of the managers. Lastly, the context, whether if it is in private or public, also greatly affect the reward allocation process that it influences whether the categorization process of reward allocation will work.