Yifeng, Tjosvold - Effects of warm-heartedness and reward distribution on.pdf - Psychologia - koni86

Group Decis Negot (2008) 17:79–96

DOI 10.1007/s10726-007-9088-4

Effects of warm-heartedness and reward distribution on

negotiation

Nancy Chen Yifeng

Dean Tjosvold

Wu Peiguan

Published online: 1 June 2007

Abstract Research is needed to identify the conditions and dynamics by which foreign

managers and local employees can negotiate their differences integratively. In an experiment

with 120 participants in South China, employees with foreign managers who communicated

warm-heartedness, compared to indifference, indicated that they had cooperative goals, a

quality relationship, were conﬁdent in future collaboration, and concluded that their man-

ager was an effective leader. Employees with foreign managers who structured mutual rather

than independent or comparative rewards found their manager’s ideas reasonable and inte-

grated them into their decisions. Results, especially if they can be replicated in ﬁeld settings,

suggest how foreign managers can negotiate effectively and develop their relationships with

Chinese employees.

Keywords Warm-heartedness · Reward distribution · Negotiation cross-cultural

1 Effects of warm-heartedness and reward distribution on decision-making between

foreign managers and Chinese employees

Managers and employees must often negotiate their different opinions and interests when

confronted with an issue that requires a decision. Negotiation researchers have studied

the conditions under which these discussions become integrative where mutual beneﬁts

are developed or distributive where each side attempts to maximize its outcomes at the

expense of the other (De Dreu, 2004; Friedman et al. forthcoming; Walton and McKersie

1965). In the global marketplace, managers and employees increasingly have different cultural

)

Management Department, Lingnan University, Tuen Mun, Hong Kong

e-mail: tjosvold@ln.edu.hk

N. C. Yifeng

e-mail: yifeng@ln.edu.hk

W. Peiguan

Lingnan (University) College, Sun Yat-Seng University, Guangzhou, China

e-mail: wupg@lingnan.net

123

N. C. Yifeng · D. Tjosvold (

N. C. Yifeng et al.

backgrounds that can make integrative solutions more difﬁcult to negotiate (Bond 2003;

Smith 2003 ). This study experimentally investigates negotiations between Chinese employ-

ees and foreign managers; it poses the question, what is the inﬂuence of warm-hearted-

ness and reward allocation on decision-making between foreign managers and Chinese

employees? It tests the hypotheses that foreign managers’ warm-heartedness, compared

to indifference, and mutual rewards, compared to independent and comparative rewards,

result in Chinese employees’ developing cooperative relationships with their foreign man-

ager, open-mindedly exploring the foreign manager’s ideas, integrating these ideas into their

decision-making, and building conﬁdence that they can work with the foreign manager in

the future.

This study makes several contributions to the literature. It empirically links the litera-

tures on expressing affect and the distribution of rewards to research on negotiations and

decision-making. The study tests the effects of the Chinese value of warm-heartedness on

the negotiations and suggests that foreign managers can communicate this Chinese value

credibly. It also contributes to the research demonstrating the utility of conﬂict for making

decisions by identifying conditions under which discussing opposing views can be useful.

This study adds to the empirical research on the value of quality relationships in China;

speciﬁcally, this study contributes to knowledge about the conditions that facilitate effective

discussion and leadership by foreign managers in China. Finally, the study provides an exam-

ple of how cross-cultural issues can be examined experimentally with random assignment to

conditions.

2 Negotiations between foreign managers and Chinese employees

Cross-cultural researchers have focused on documenting value differences between nations

and regions. They have concluded, based on comparing samples from China and the West, that

Chinese people are more collectivists who value their connections to others and relationships

highly whereas people from the West are more individualist who value their independent and

unique selves (Chen and Chen 2004; Child and Markoczy 1993; Hui et al. 1999; Jacobs et al.

1995; Leung and Yeung 1995; Tsui and Farh 1997; Xin and Pearce 1996) . Psychologists have

argued that cultural differences affect people’s construal of themselves as interdependent or

independent and these self-construals in turn signiﬁcantly alter their emotions and behavior

(Markus and Kitayama 1991) .

Cultural differences appear to be likely to make effective negotiations between people from

different cultures more difﬁcult as they increase misunderstandings of meaning and intentions

(Earley and Gibson 2002; Earley and Mosakowski 2000) . Recently, Bond (2003), Javidan

et al. (2004) and Smith (2003) have argued that researchers should not rely so extensively

on comparing samples of people from different cultural backgrounds but should examine the

interaction between cultural diverse people directly. Rather than compare foreign managers

and Chinese employees, this study experimentally investigates conditions that affect how

foreign managers and Chinese people discuss and negotiate their differences within China.

Speciﬁcally, this study proposes that foreign managers who express warm-heartedness

and distribute rewards mutually rather can more effectively integrate their differences. It

argues that Chinese employees, as collectivists who construe themselves connected with

others will respond positively to warm-heartedness and a mutual distribution of rewards as

both of them emphasize the value of and the commitment of the foreign managers to devel-

oping relationships with them (Markus and Kitayama 1991; Oyserman et al. 2002; Triandis

1995) .

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Effects of warm-heartedness and reward distribution on negotiation

2.1 Warm-heartedness and indifference

Foreign managers may be able to communicate that they want to develop a relationship with

their Chinese employees by expressing warm-heartedness. Chinese people have traditionally

valued warm-heartedness (Bagozzi et al. 2001; Greenberger and Chen 1996; Greenberger

et al. 2000) . Western researchers have identiﬁed happiness, surprise, fear, sadness, anger, dis-

gust-contempt, and interest as major emotions (Eckman 1972) . Warm-heartedness is closely

related to the Western emotion of happiness but, appropriately for collectivist China, is more

relationship-oriented. It is not only communicating that the person is in good spirits but also

a desire to support and be open to the other. Warm-heartedness may communicate that the

other is accepted and their relationship is valued. Indifference, on the other hand, expresses

a disinterest in the relationship and little openness to the other person.

Although there is not much evidence on the effects of warm-heartedness in China, research

in the West has investigated the expression of affect in conﬂict and negotiations (Johnson

1971a,b; Tjosvold 1984; Tjosvold and Sun 2003) . Warm-heartedness would appear to com-

municate directly a positive regard that is experienced as rewarding and concretely reafﬁrms

the relationship. The other person feels accepted as a person and concludes that they have

a strong, open relationship, characterized by cooperative, compatible goals where by pro-

moting the other’s goals they also promote their own (Deutsch 1973) . On the other hand,

indifference conveys little interest and valuing of the other person and the relationship. Feel-

ing rejected and disconﬁrmed, the other concludes that they have a weak relationship without

cooperative goals.

By reafﬁrming a cooperative relationship, warm-heartedness may be an important inﬂu-

ence on the interaction and outcomes of leaders and employees. As documented by previous

research (Tjosvold 1998) , the conclusion of a cooperative relationship can induce an open-

minded discussion and integration of diverse views into their own thinking and decision-

making and conﬁdence in future collaborative work.

Based on the above reasoning, it is hypothesized:

H1: Chinese employees whose foreign managers communicate warm-heartedness,

compared to indifference, develop a cooperative relationship, open-mindedly discuss

their opinions, integrate their managers’ diverse views into their decision-making, and

are conﬁdent in future collaborative work.

2.2 Distribution of rewards

Chinese leaders are often assumed to be autocratic and not willing or even needing to share

rewards with employees, but recent research has emphasized that Chinese managers are

expected to reciprocate employee loyalty or risk losing their support (Tjosvold et al. 2004) .

The Chinese model of leadership imposes the moral obligation upon managers to consider

and respond to the needs of their employees (Cheng et al. 2004) . Employees who believe

their leader has not sufﬁciently provided for them may withdraw from the relationship, albeit

often in an indirect manner ( Abroad 2004; Bai 1998 ; Liu 1998; Morris and Leung 2000; Pun

2001 ). Foreign managers then may be able to negotiate with and develop a relationship with

employees to the extent that they reward effectively.

But how should foreign managers reward so that employees consider them fair and enhanc-

ing? Research in the West has investigated reward distribution and, in particular, has shown

that a critical justice consideration involves the principles by which tangible outcomes of

rewards and burdens should be distributed (Folger and Greenberg 1985; Greenberg 1990) .

123

N. C. Yifeng et al.

Distributions considered unjust provoke objections, withdrawal, and aggression (Colquitt

et al. 2001; Rawls 1999; Simons and Roberson 2003) .

Equity is an inﬂuential normative approach to determining the fairness of the distribution

of outcomes. Equity solutions occur when the people are rewarded to the extent that their

individual contributions to the joint activity are valued. The more they contribute as individu-

als, the more rewards they believe they should be given. Considerable evidence indicates that

the equity principle operates in many situations, including those in China (Cohen-Charash

2001; Colquitt et al. 2001; Fields et al. 2000; Lam et al. 2002) .

There are two distinct ways that individuals can be rewarded based on their own perfor-

mance. People can be rewarded based on individual performance evaluated against pre-estab-

lished criteria. They are awarded to the extent that their performance fails to meet, meets, or

exceeds these standards. The rewards of one do not impact the rewards of others. All individ-

uals could be rewarded generously if they all contributed according to the criteria whereas

all could be little rewarded if their contributions were considered below the standards. This

study labels this distribution as independent rewards.

Rewards can also be based on individual performance relative to others. Individuals are

rewarded to the extent that they contribute more than others. Here individuals are evaluated

and rewarded in comparison to others. Typically, some people would be highly rewarded

whereas others would be little rewarded. This distribution is labeled comparative rewards.

Equity is not the only principle operating within organizations (Chen et al. 2002) .Rewards

can be distributed mutually where everyone receives rewards to the extent that they succeed

together (Deutsch 1985) . The emphasis is on everyone being rewarded when they jointly

meet or exceed their standard and no one when it fails. Mutual rewards do not require that

everyone receive the identical outcomes, only that people are rewarded more, the more they

achieve together.

Deutsch (1985) argued that these reward distribution principles have profound effects

on relationships and interaction. Mutual distribution emphasizes cooperative goals where

people understand that, as they will succeed or fail together, it is to their own interest to help

each other be effective. They believe they can rely upon each other, and, therefore, are open

and supportive of each other. However, equity distributions based on independent rewards or

comparative rewards do not strengthen cooperative relationships.

These studies suggest that a mutual distribution of rewards between foreign managers and

Chinese employees is likely to communicate to the employees that they can develop a strong

relationship with their foreign manager and thereby can negotiate openly and integratively.

However, distributing rewards either independently or comparatively between the managers

and employees is likely to leave employees believing that they do not have an effective,

mutual relationship and to negotiate their differences distributively.

Based on the above reasoning, it is hypothesized:

H2: Chinese employees whose foreign managers distribute rewards mutually, rather

than independently or comparatively, develop a cooperative relationship, open-mind-

edly discuss their opinions, integrate their managers’ diverse views into their deci-

sion-making, and are conﬁdent in future collaborative work.

Warm-heartedness and mutual rewards are expected to both contribute to integrative nego-

tiations between foreign managers and Chinese employees. Researchers have argued that both

the nonverbal messages of emotions and information processing are powerful forms of social

communication (Druckman et al. 1982) . Warmth-hearted is an affective communication that

can strengthen interpersonal bonds whereas mutual distribution is a cognitive communication

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Effects of warm-heartedness and reward distribution on negotiation

that can strengthen them. The experimental study allows for identifying the interplay between

these emotive and information communications by examining interaction effects. However,

previous research does not suggest hypotheses of interaction effects. This study hypothesizes

only main effects hypotheses but empirically examines whether interaction effects emerge

that should be pursued more vigorously in future research.

3Method

3.1 Overview and participants

To test the hypotheses, four foreign graduate students were recruited to be confederates and

given the role of manager and 120 Chinese undergraduate students from a university in

Guangzhou, China were recruited to take the role of employees in an organizational simula-

tion.

The foreign students were four male graduate students from Africa, Nepal, Australia, and

America, with an average age of 33. They were given 15 h of training in how to induce par-

ticipants’ involvement and commitment in the experimental situation and how to negotiate

in a standard manner and carry out the experimental inductions.

The participants were university students; their average age was 21 years and 6 months,

and 55% were female. They were randomly assigned to six conditions, 20 in each condition.

They received 10 RMB (about US$1.25) for their participation and one chance in a lottery

for 500 RMB (US$42).

They read in the Instructions that their company had decided that a job rotation pro-

gram was too expensive in the face of growing competition; managers and employees had

to negotiate the value of job rotation and develop a decision whether it should be eliminated

or modiﬁed. Managers were given the position that the program should be eliminated and

employees that it should be continued as it is.

The participants studied the Instructions and learned of the reward distribution, the situ-

ation and their positions in Phase 1. In the second phase, they discuss directly with one of

the confederates who expressed warm-heartedness or indifference for a maximum of 18 min.

In Phase 3, they completed a decision form and measures of the inductions and dependent

measures and were then debriefed. The discussion was not taped.

3.2 Independent variables

2 design. Each induction is discussed in turn.

The warm-heartedness induction was implemented through confederate behavior and

a mid-discussion questionnaire. The confederates communicated their warm-heartedness

towards the workers verbally and nonverbally. To show their warm-heartedness towards the

employees verbally, supervisors indicated that they were interested in listening to the prob-

lems and difﬁculties faced by employees. On the mid-discussion questionnaire, they circled

a “6” on a 7-point rating scale for the question about their feelings of warm-heartedness

indicating that they felt highly warm-hearted to the other discussant. Previous research has

indicated that communicating affect is multi-channeled with facial expressions, body move-

ments, visual gaze, and vocal tone as well as verbal signals all affecting how the receiver

understands the other’s emotions (Davitz and Davitz 1959; Druckman et al. 1982) .These

123

The reward distributions of mutual reward, independent reward, and comparative reward were

crossed with the warm-heartedness variable (warm-hearted vs. indifferent communication)

to form a 3

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