A type of organizational reward system based on personal power is described and partially tested. The theory, developed from observations of Hungarian organizations, is grounded in theories of procedural justice and learned helplessness. Person‐based organizational reward systems are characterized by highly valued rewards combined with personalistic criteria for reward distribution. Such organizational reward systems were hypothesized to lead to employee perceptions of organizational unfairness; 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 organizations classified as having person‐based systems and five non‐person‐based organizations (two Hungarian privately‐owned companies, one American state‐owned and two American privately‐owned organizations). In addition, 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. Copyright © 1994 John Wiley & Sons, Ltd.

Many employees in the world are evaluated and rewarded at work based on who they are ("particularism") rather than based on impersonal judgments of their performance ("universalism"). Yet the field of organizational behavior has been virtually silent on how employees react to workplaces dominated by particularism. In an effort to understand the role of particularistic organizational practices, several ideas from comparative institutions theories are applied to questions of organizational behavior, and the model is tested in samples of large manufacturing and service organizations in the United States and Hungary. It was found that employees in a modernist political system (United States) did echo social scientists' claims by reporting that their employers' personnel practices were comparatively more universalistic than those in organizations operating in a neotraditional polity (Hungary). This perception of differences in personnel practices mediated the relationship between political system and employees' trust in one another, their perceptions of coworker shirking, and their organizational commitment.

Procedural justice is placed within a larger theoretical context developed from theories of comparative institutions. In a sample of Lithuanian and American electronics companies it was found that: (a) Employees in the "neotraditional" political economy perceived their organizations as less meritocratic than did their peers in the "modern" political economy. (b) The relationship between political economy and employee perceptions of procedural justice was mediated by the organizations' use of meritocratic practices. (c) Procedural justice was associated with employee organizational commitment and coworker trust, controlling for political economy.