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Pay Communications and Fairness: An Employee Perspective
Abstract
A variety of tools are used to create perceptions of fairness including job evaluation, pay surveys and merit pay guide charts, but without effective pay communications the benefits of fair pay programs can be lost. Increased access to information about pay (e.g., salary.com, O’net and Monster.com), along with increased use of social media where personal information is routinely shared, has changed employee attitudes about pay transparency and information employers should communicate about pay. This study examines the relationships of pay communications, pay transparency and pay understanding with employee perceptions of pay fairness. Data collected from 300 full-time employees across as many organizations found that pay understanding mediated the relationship between pay communications and pay fairness, while controlling for gender, education level, age and income level of respondents. When pay communications was controlled for in mediation analysis, variance attributed to pay transparency disappeared.
... Equity Theory (Adams, 1963) provides a theoretical lens to interpret this relationship, suggesting that employees assess the fairness of their compensation by comparing their input-output ratios to those of their peers. Perceptions of inequity lead to dissatisfaction and an increased likelihood of seeking alternative employment (Adams, 1963;Scott, 2018). The current study revealed that many NITA employees perceive their salary structure as unfair and are dissatisfied with flexible benefits. ...
... Equity Theory (Adams, 1963) provides a theoretical lens to interpret this relationship, suggesting that employees assess the fairness of their compensation by comparing their input-output ratios to those of their peers. Perceptions of inequity lead to dissatisfaction and an increased likelihood of seeking alternative employment (Adams, 1963;Scott, 2018). The current study revealed that many NITA employees perceive their salary structure as unfair and are dissatisfied with flexible benefits. ...
This study investigates the relationship between human resource management (HRM) practices and employee retention in Ghana's Information and Communication Technology (ICT) sector, emphasizing the moderating role of job engagement. High turnover rates in this sector pose significant challenges, prompting the need for effective HRM strategies. The study identifies key HR practices, including compensation and training and development, as critical drivers of employee retention. It employs a quantitative approach, utilizing structural equation modeling (SEM) to analyze data from employees at the National Information Technology Agency (NITA). The findings reveal that both compensation and training significantly influence retention rates, with job engagement enhancing these effects. Specifically, engaged employees are more likely to remain with their organizations when they perceive fair compensation and effective training programs. However, the study uncovers a complex interaction where high job engagement may negatively moderate the relationship between training and retention, suggesting potential role overload or misalignment with employee needs. The research contributes to existing literature by integrating theories such as Equity Theory, Human Capital Theory, and Job Demands-Resources Theory to explain how HRM practices can be optimized for better retention outcomes. The implications extend to HR managers who are encouraged to develop equitable compensation structures and comprehensive training initiatives while fostering an engaging work environment. Limitations include the study's cross-sectional design and focus on a single organization, which may affect generalizability. Future research is recommended to explore longitudinal effects and additional variables influencing employee retention across diverse sectors.
... As a result, employees may be less surprised by the performance evaluation they get during pay setting (Pichler et al., 2020). Such communication about employees' performance has been associated with higher levels of fairness in relation to pay setting among employees (Scott, 2018) and might tune employees' and managers' perceptions and increase congruence in pay-setting justice. At the same time, when managers give feedback continuously (and not just at the annual pay-setting discussion), the likelihood increases that managers have a better sense of what employees do, what challenges they encounter, and how they perform on an average basis. ...
There is often a gap between what managers perceive they do in terms of fairness (managers’ justice enactment perceptions) and how fairly employees feel treated by their supervisor (employees’ organizational justice perceptions). This study investigates three managerial actions as potential predictors of congruence in managers’ justice enactment and employees’ justice perceptions. Using individual pay setting as context, the authors hypothesize that goal clarity, continuous feedback, and supervisory credibility predict congruence in justice perceptions (distributive, procedural, interpersonal, and informational justice). Analyses are based on 124 pay-setting managers with their employees from an industrial company in Sweden. Results reveal that goal clarity, continuous feedback, and supervisor credibility reduce the mean-value difference in justice perceptions between managers and employees. This study broadens the organizational justice literature by contributing with a new way of simultaneously studying justice enactment and justice perceptions to further knowledge on how to facilitate and improve fairness in organizations.
... distributional fairness (internal vs. external) being more influential than procedural fairness 17 . Therefore, CF has a significant influence on compensation satisfaction and can improve the work engagement and satisfaction of employees 51,52 . Therefore, our assumption is that. ...
This study explores the factors influencing athletes’ compensation satisfaction and their configuration effects. A mixed research approach that combines regression analysis and fuzzy-set qualitative comparative analysis (fsQCA) was applied to process the survey data of 352 athletes from six provinces. The regression analysis results demonstrate that economic compensation, the compensation system, the external environment, and compensation fairness all have a significant positive effect on athletes’ compensation satisfaction. Accordingly, the fsQCA approach was applied to explore the combined effects of the factors influencing athletes’ compensation satisfaction, which verifies the conclusions drawn from regression analysis and provides improvement paths for increasing athletes’ compensation satisfaction.
... Previously Judge (1993) has provided representative conclusions about research on the dimensions of salary satisfaction: "it is clear that the dimensions of salary satisfaction are not independent, and in fact some are highly related". It is very clear that fairness in providing compensation is certainly important for employees in an organization (Scott, 2018), although nowadays employees working in the public sector are familiar with a performance-based compensation payment model (Park, 2018) or even a merit system (McKinney et al., 2013). ...
Managing compensation is an interesting and sensitive issue in organizations, including public organizations.This study examines the effect of each aspect of compensation on satisfaction among public officers. Based on the equity theory and the expectancy theory, this research focuses on the central concept observed about compensation, with a total of 122 public officials who work in two government agencies in Medan, North Sumatra, participating as respondents. The results showed that among the four aspects of compensation observed and tested in this study, the findings show that only the incentive aspect had an essential effect on employee satisfaction with compensation. The three other aspects of compensation were found to have no significant effect on employee satisfaction with compensation. The practical implication for public officers who work in the public sector, the organizational incentive pattern is very attractive to them. This study also argues that these same challenges can also serve as drivers shaping the future of public compensation as a theory and practice. While conclusion also offers a new perspective in favor of the argument advanced here.
... Werner and Ones (2000) also confirmed that employees' knowledge of the pay system matters because differences in perceived fairness among various factors are moderated by information on the pay system. Furthermore, Scott (2018) shows that pay communications among employers and employees is an important factor affecting pay fairness perception. ...
Pay fairness perception is considered a significant determinant of employee turnover. This study analyzes whether public-sector employees’ pay fairness perception is promoted when workers are notified of the wage level of similar employees working in other sectors (i.e., relative wage). A randomized survey experiment was conducted to test the hypothesis that relative wages matter for pay fairness perception. The results show that informing employees of other workers’ wage levels enhances pay fairness perception. The subgroup analysis shows that the effect is more pronounced for employees who are relatively early in their career. The results imply that providing information on relative wage can be an effective way of promoting pay fairness perception, thereby reducing worker turnover and contributing potentially to productivity gains in public-sector organizations where turnover rate is salient.
... [32][33][34][35][36][37][38] Most studies involve U.S. employees, and few studies compare how employee perceptions of pay transparency differ across countries or cultures. 39,40 Specifically, this study examines, from an employee perspective, how pay transparency and pay transparency preferences differ across multiple countries in Central America, North America and Europe. ...
Countries differ with regard to culture, employment laws and employment traditions and practices, all of which suggest that employees may have different perceptions of the degree to which their company is transparent about pay as well as their own preferences for pay transparency. This study examines, from an employee perspective, how pay transparency and pay transparency preferences differ across multiple countries in Central America, North America and Europe. Pay communications, pay transparency and pay transparency preferences differed among respondents of the countries studied. However, Hofstede’s culture l country measures, uncertainty avoidance, lower levels of individualism and lower levels of power distance were not associated with preferences for pay transparency as might be expected from the literature. Although pay transparency preferences are not related to employee perceptions regarding employer pay communications, pay transparency preferences are related to pay transparency.
Using a labour process approach, this article examines how workers in three factories in China learnt about the workplace-level pay systems governing their employment relationships. By outlining the processes through which workers learnt about pay at work, this article sheds light on how workers, faced with a perplexing variable pay system and managerial control over pay disclosure, can overcome the pathways towards ignorance and ultimately challenge the workplace-level pay communication regime. It is shown that pay transparency, rather than being merely an outcome of managerial practices to improve employee motivation and organisational performance, is an outcome of dynamic and contested social interactions between management and labour.
The field of organizational justice continues to be marked by several important research questions, including the size of relationships among justice dimensions, the relative importance of different justice criteria, and the unique effects of justice dimensions on key outcomes. To address such questions, the authors conducted a meta-analytic review of 183 justice studies. The results suggest that although different justice dimensions are moderately to highly related, they contribute incremental variance explained in fairness perceptions. The results also illustrate the overall and unique relationships among distributive, procedural, interpersonal, and informational justice and several organizational outcomes (e.g., job satisfaction, organizational commitment, evaluation of authority, organizational citizenship behavior, withdrawal, performance). These findings are reviewed in terms of their implications for future research on organizational justice.
Data collection in consumer research has progressively moved away from traditional samples (e.g., university undergraduates) and toward Internet samples. In the last complete volume of the Journal of Consumer Research (June 2015-April 2016), 43% of behavioral studies were conducted on the crowdsourcing website Amazon Mechanical Turk (MTurk). The option to crowdsource empirical investigations has great efficiency benefits for both individual researchers and the field, but it also poses new challenges and questions for how research should be designed, conducted, analyzed, and evaluated. We assess the evidence on the reliability of crowdsourced populations and the conditions under which crowdsourcing is a valid strategy for data collection. Based on this evidence, we propose specific guidelines for researchers to conduct high-quality research via crowdsourcing. We hope this tutorial will strengthen the community's scrutiny on data collection practices and move the field toward better and more valid crowdsourcing of consumer research.
Purpose
Amazon Mechanical Turk is an increasingly popular data source in the organizational psychology research community. This paper presents an evaluation of MTurk and provides a set of practical recommendations for researchers using MTurk.
Design/Methodology/Approach
We present an evaluation of methodological concerns related to the use of MTurk and potential threats to validity inferences. Based on our evaluation, we also provide a set of recommendations to strengthen validity inferences using MTurk samples.
Findings
Although MTurk samples can overcome some important validity concerns, there are other limitations researchers must consider in light of their research objectives. Researchers should carefully evaluate the appropriateness and quality of MTurk samples based on the different issues we discuss in our evaluation.
Implications
There is not a one-size-fits-all answer to whether MTurk is appropriate for a research study. The answer depends on the research questions and the data collection and analytic procedures adopted. The quality of the data is not defined by the data source per se, but rather the decisions researchers make during the stages of study design, data collection, and data analysis.
Originality/Value
The current paper extends the literature by evaluating MTurk in a more comprehensive manner than in prior reviews. Past review papers focused primarily on internal and external validity, with less attention paid to statistical conclusion and construct validity—which are equally important in making accurate inferences about research findings. This paper also provides a set of practical recommendations in addressing validity concerns when using MTurk.
This article examines the impact of employee understanding of components of their pay system on pay satisfaction and leaving intentions for a poorly paid occupational group. Employee understanding of pay arrangements is found to have an indirect impact (through pay satisfaction) on employee intention to leave. Based on this sample, organisations may be able to improve the pay satisfaction of their employees and reduce employee turnover intention simply by improving their pay communication approaches.
This article analyzes organizational mechanisms, and their contexts, leading to gender inequality among stockbrokers in two large brokerages. Inequality is the result of gender differences in sales, as both firms use performance-based pay, paying entirely by commissions. This article develops and tests whether performance-support bias, whereby women receive inferior sales support and sales assignments, causes the commissions gap. Newly available data on the brokerages' internal transfers of accounts among brokers allows measurement of performance-support bias. Gender differences in the quality and quantity of transferred accounts provide a way to measure gender differences in the assignment of sales opportunities and support. Sales generated from internally transferred accounts, controlling for the accounts' sales histories, provide a "natural experiment" testing for gender differences in sales capacities. The evidence for performance-support bias is (1) women are assigned inferior accounts and (2) women produce sales equivalent to men when given accounts with equivalent prior sales histories.
How do salespeople make judgments of merit pay fairness? By what mechanisms do fairness judgments influence the performance and commitment of salespeople? Using equity and social exchange theories, the authors examine these questions for industrial salespeople who work in a Fortune 500 firm and provide four key findings. First, of the three dimensions of fairness judgments, they find the interactional fairness dimension to be relatively more important than procedural or distributive fairness in influencing job outcomes of salespeople. Second, supervisory behaviors have significant influence in shaping salespeople's fairness judgments, particularly judgments of distributive and interactional fairness. Third, the results underscore the contrasting mediating role of trust in supervisor and job satisfaction. Although trust in the supervisor is important in reducing salespeople's opportunistic behaviors, the authors find job satisfaction to be important in enhancing their loyalty to the organization. Fourth, salespeople's job performance is influenced directly by extrinsic factors such as fairness of current rewards and potential for rewards. In addition, the authors outline implications for theory and practice.
Purpose
The paper's purpose is to investigate the relationships between pay communication and referent choice, pay satisfaction and pay equity perceptions.
Design/methodology/approach
A sample of 149 employed graduate business students from a variety of organizations were surveyed at two different times, first to assess dependent variables (pay satisfaction and pay equity perceptions), and second to measure perceived pay policies.
Findings
Contrary to predictions, increased pay communication was not associated with referent choice, and referent choice was unrelated to pay attitudes. Pay communication was also unassociated with pay satisfaction. However, increased pay communication was found to be negatively related to pay equity perceptions.
Research limitations/implications
A two‐questionnaire survey methodology was designed to minimize the possibility of common method variance. Because few employers communicate about pay, there was restriction of range for this independent variable, perhaps constraining results. However, the use of multiple employers, even in this student population, constitutes a meaningful sample.
Practical implications
Employers should be cautious about what pay information they provide to their employees, since this study suggests that increased pay communication results in lower pay equity perceptions.
Originality/value
Research in this area is extremely limited and thus this paper provides a strong foundation for further investigation.
In most previous research, pay satisfaction has been treated as satisfaction with pay level; little is known about how individuals respond to pay systems. LISREL analyses of survey responses of approximately 2,000 managers and executives in pay-for-performance plans supported the models devised in this study. Perceived pay relative to external others predicted reactions to pay but not to pay systems. Pay-systems reactions were associated with participants' perceptions that (1) the distribution of rewards was consistent with policy; (2) they fared better under the current pay system than under the previous seniority system; (3) performance appraisals adhered to written standards; and (4) the pay plan was adequately funded. Perceived overreward predicted more positive reactions than did perceived equitable reward or underreward. Global satisfaction, job search, and intent to leave before retirement were related to both types of reactions. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
A theory of social inequity, with special consideration given to wage inequities is presented. A special case of Festinger's cognitive dissonance, the theory specifies the conditions under which inequity will arise and the means by which it may be reduced or eliminated. Observational field studies supporting the theory and laboratory experiments designed to test certain aspects of it are described. (20 ref.) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
We use a simple theoretical framework and a randomized manipulation of access to information on peers' wages to provide new evidence on the effects of relative pay on individual job satisfaction and job search intentions. A randomly chosen subset of employees of the University of California (UC) was informed about a new website listing the pay of University employees. All employees were then surveyed about their job satisfaction and job search intentions. Our information treatment doubles the fraction of employees using the website, with the vast majority of new users accessing data on the pay of colleagues in their own department. We find an asymmetric response to the information treatment: workers with salaries below the median for their pay unit and occupation report lower pay and job satisfaction, while those earning above the median report no higher satisfaction. Likewise, below-median earners report a significant increase in the likelihood of looking for a new job, while above-median earners are unaffected. Our findings suggest that job satisfaction depends directly on relative pay comparisons, and that this relationship is non-linear.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
We generate and test a moderated mediation model of the effects of pay secrecy—a pay communication policy restricting employees’ access to information regarding the level of other employees’ pay in the organization—on individual task performance. According to this model, the effects of such a policy are posited to be mediated by informational fairness, procedural fairness, and performance-pay instrumentality perceptions, and moderated by tolerance for inequity. Using a lab-based simulation, our findings partially support this model, suggesting that perceived instrumentality mediates the adverse effect of pay secrecy on individual task performance but only for those low in inequity tolerance. For them, the instrumentality-mediated indirect effect accounted for over 20% of the total effect of pay secrecy on individual task performance. For those highly tolerant of inequity, a policy of pay secrecy was found to be directly associated with a higher level of individual performance than pay openness. The implications of the findings for research and practice are discussed.
This article uses meta-analysis to summarize previous empirical studies which examine the relationship between actual income/pay satisfaction and organizational commitment (OC) across different structural settings. Twenty-one studies with correlational data on the relationship between OC and income, and 27 studies dealing with OC and pay satisfaction are examined; these studies include 23 and 31 independent samples, respectively. The findings reveal a moderator effect related to type of occupation in the OC-income relationship, and to sector in the OC-pay satisfaction relationship. The findings also show the moderating effect of measurement of OC on pay satisfaction. Theoretical and methodological considerations pertaining to the OC-rewards relationship are discussed. Directions for future research and practical implications are indicated.
Brockner and Adsit (1986) found that satisfaction with an exchange relationship was more strongly related to perceptions of equity among men than women. Kahn (1972) reported that men were more likely than women to distribute outcomes to individuals in direct proportion to their input. We evaluated potential gender differences among 12,979 personnel in 30 different organizational systems in (a) correlations between fairness and job satisfaction scores and (b) standardized group differences in the perceived amounts of pay and promotion fairness and expressed levels of facet and global job satisfaction. The fairness-satisfaction relationship was not higher for men, and there were no practical differences in fairness perceptions and job satisfaction between men and women.
Examined the effect of equity motivation and desire to prevent conflict on reward allocation in 2 studies with undergraduates (N = 152). Ss distributed a reward among the members of a small group. They maintained equity by giving higher rewards to recipients with better performance. However, Ss who desired to prevent interpersonal conflict increased the worst performer's share of reward at the expense of the best performer. Reward allocation was also influenced by whether the distribution of reward would be kept secret. When there was secrecy, Ss were less likely to inflate the rewards of the worst performer. Their desire to withhold information about the distribution of reward was greatest for recipients given low reward. (23 ref.)
On the basis of fairness heuristic theory, the authors provide an explanation of the frequently replicated fair process effect (the finding that perceived procedural fairness positively affects how people react to outcomes). The authors argue that, in many situations, people may find it difficult to assess whether their outcome is fair or unfair and satisfying or unsatisfying because they only have information about their own outcome and they do not know the outcomes of others and that, in these situations, people use the fairness of the procedure as a heuristic substitute to assess how to judge their outcome. The results of 2 experiments corroborate the authors' line of reasoning. Findings are discussed in terms of recent developments toward an integration of the procedural and distributive justice domains.
This work examines the aggregation of justice perceptions to the departmental level and the business-unit level, the impact of these aggregate perceptions on business-unit-level outcomes, and the usefulness of the distinction between procedural and interpersonal justice at different levels of analysis. Latent variables analyses of individual-level and department-level data from 4,539 employees in 783 departments at 97 hotel properties showed that the 2 justice types exercise unique paths of impact on employees' organizational commitment and thus on turnover intentions and discretionary service behavior. Business-unit-level analyses further demonstrate paths of association between aggregate justice perceptions, aggregate commitment levels, and the business-unit-level outcomes of employee turnover rates and customer satisfaction ratings.
On the basis of a “before-after with control group” experimental design, empirical evidence is provided that shows the amount of information disclosed about pay had a major impact on salesmen's performance and job satisfaction.
This study examines both the main and the interaction effects of knowledge of the pay structure and social and self pay referents on pay attitudes in a setting with wage andjobduty tiers. Knowledge of the pay structure when hired and expected pay were among the most important predictors of pay fairness and pay satisfaction. The significant interaction effects found across tier levels indicated pay knowledge had a differential impact on pay attitudes. The interaction effects, however, did not support the assumption that the reason attitudes differ among employees on various tier levels is that they use différent referents.
Research on pay satisfaction has been criticized for inattention to determining whether its multiple dimensions have different consequences and for overreliance on cross-sectional designs. Structural equation analyses of data from two field studies showed that satisfaction with pay systems, but not pay levels, led to greater perceived organizational support, which in turn affected employer commitment and organizational citizenship. Union commitment was a positive function of pay system satisfaction and a negative function of pay level satisfaction.
The federal government, through its recent Executive Orders, is mandating pay transparency for the federal contracting community. This new way of doing business has potentially profound implications for all employers. Companies must be prepared for employees, the federal government and third parties to closely scrutinize their compensation systems and decision-making practices.
Pay secrecy is a contentious issue in many organizations and a controversial one in our society. However, there has been little scholarly research on this topic. We hope to address this void by exposing the complexity of pay secrecy as a construct. What are its costs and benefits? What factors affect the link between pay secrecy and the extent to which it is a cost or benefit? This article reveals the complexity of pay secrecy and, we hope, generates ideas for much new research in the broad management field.
Great progress has been made in documenting how employer practices may shape workplace inequality. Less research attention, however, has been given to investigating which organizational strategies are effective at addressing gender and racial inequality in labor markets. Using a unique field study design, this article identifies and tests, for the first time, whether accountability and transparency in pay decisions-two popular organizational initiatives discussed among scholars and practitioners-may reduce the pay gap by employee gender, race, and foreign nationality. Through a longitudinal analysis of a large private company, I study the performance-based reward decisions concerning almost 9,000 employees before and after high-level management adopted a set of organizational procedures, introducing accountability and transparency into the company's performance-reward system. Before such procedures were introduced, there was an observed gap in the distribution of performance-based rewards where women, ethnic minorities, and non-U.S.-born employees received lower monetary rewards compared with U.S.-born white men having the same performance evaluation scores and working in the same job and work unit with the same manager and the same human capital characteristics. Analyses of the company's employee performance-reward data after the adoption of accountability and transparency procedures show a reduction in this pay gap. I conclude by discussing the implications of this study for future research about employer strategies targeting workplace inequality and diversity.
Many managers have misconceptions about pay and many firms are not getting their money's worth from their compensation programs. These programs can be improved by more clearly tying pay to performance, using more flexible benefit programs, and eliminating secrecy.
The relationship between interclass pay equity and product quality is examined in a sample of 102 corporate business units. A small pay differential between lower-level employees and upper-echelon managers (after controlling for inputs) is theorized to lead to high product quality by increasing lower-level employees' commitment to top-management goals, effort, and cooperation. Interclass pay equity is determined by comparing the pay and inputs of hourly workers and of lower-level managers and professionals to those of the top three levels of managers. Consistent with the predictions of distributive justice theory, both measures of pay equity are positively related to business-unit product quality.
Although a limited amount of research exists on pay communication, most shows that pay communication is associated with positive attitudes. Little research exists on pay secrecy and its outcomes. Using equity theory, this article explores the dynamics of how perceived pay communication and perceived pay secrecy policies relate to desirable attitudes. The article proposes that pay equity is the link that mediates these relationships. Data were collected in a U.S. public utility, and findings reveal that perceived communication about how pay levels are determined is positively associated with affective organizational commitment and three dimensions of pay satisfaction, and most of these relationships are fully or partially mediated by pay equity. While perceived written pay secrecy policies show no relationship with attitudes, perceived unwritten secrecy policies negatively predict pay administration satisfaction and this relationship is mediated by pay equity. Finally, neither written nor unwritten pay secrecy policies are related to whether or not respondents report discussing their pay.
A field study investigated 368 employees’ perceptions of the fair-ness of work group incentive pay plans. In particular, we studied therelationships between six antecedent variables (understanding of thepay plan, satisfaction with base pay, organizational commitment, beliefsin the pay plan eflectiveness, plan payout amount, and group identijication) and outcome variables, including fairness judgments of both theprocesses associated with the pay plan as well as the earned payoutamounts. The setting for this study was a major nonunion production facility of a Fortune 500 company that is involved in chemical produc-tion. The findings indicate that understanding of the pay plan, belief inthe pay plan effectiveness, and organizational commitment were relatedto perceptions of procedural justice. Moreover, pay satisfaction, under-standing, belief in the pay plan effectiveness, and organizational commitment were associated with perceptions of distributive justice.Further, we found significant effects of two control variables— job classification on perceptions of procedural justice, and organization altenure on both perceptions of procedural and distributive justice.
We conducted a survey across a two-year period to examine the attitudinal effects of skill-based pay (SBP) plans in a consumer products company in the Northeast region of the United States. We examined the relationship between SBP plan characteristics and employees’ evaluation of (and reactions to) the pay system; fairness perceptions were considered as the explanatory mediating variable. The results demonstrate that SBP plans, which provide training and are better understood and communicated, will lead to an increased general perception of fairness which, in turn, will lead to more positive evaluations of the plans a year later. Implications for the relationships between fairness perception and pay system design are discussed.
Two studies were used to examine the moderating effect of gender on the justice-outcome relationships. Contrary to hypothesis, gender moderates the relationship between distributive justice and trust in supervisor in sample 1. It is possible that women are concentrating more on distributive issues rather than procedural justice issues in order to address past pay discrepancies. Further, gender did not moderate any other justice-outcome relationships. These results may indicate a recent trend toward work value similarity and narrowing of gender differences.
Purpose
The purpose of this study was to investigate the perceived gender differences in pay and promotion of bank managers in Nigeria, and how these differences affect job overall satisfaction of male and female bank managers in selected banks in Nigeria.
Design/methodology/approach
The population for this study comprised bank managers who were members of the Chartered Institute of Bankers of Nigeria. A total of 800 questionnaires were sent to potential respondents chosen from 50 banks. A total of 512 usable questionnaires were returned giving a response rate of 64 percent.
Findings
Results of this study indicate that a salary differential does exist between male and female bank managers in Nigeria. Male managers were more satisfied with their salary than their female colleagues. Results also indicated that there were gender differences in promotion. Male managers were overall more satisfied with their company promotion policies than their female counterparts.
Research limitations/implications
This research is limited to the banking industry. Thus, the results cannot be generalized to other industrial sectors of the economy. This study needs to be replicated in other organizations using the same method.
Practical implications
The study offers practical suggestions to the banking industry and human resources managers on how to recruit, pay, promote and retain women managers as well as to maintain gender equity in the industry.
Originality/value
The study examines gender related issues in a developing economy this is under‐researched area. It offers recommendations on how to provide opportunities for women to excel in the banking industry in a developing economy.
Recent reviews indicate that little is known about individuals' fairness judgements of their own received pay and the bases underlying these judgements. This paper reports the results of an investigation into the subject, based on a cross-sectional city sample of 222 employees in Israel. The investigation focused on several prevalent theoretical propositions about the bases of fairness judgements and a number of hypotheses derived from them.
The findings indicate that pay fairness evaluations may be based on comparisons with similar as well as dissimilar others; that they are guided by norms of contribution as well as norms of need; that feelings of inequity develop where inputs/investments are undervalued in terms of prevalent norms of just exchange ratios. The findings also indicate that variances in the individuals' frames of reference are partly related to a variety of background characteristics such as sex, age, income, education, etc.
Knowledge of the pay system has been identified as one of the key elements affecting the success of the reward system. In this paper, the aim is to study how communication, performance feedback and membership length are related to profit-sharing knowledge, and how profit-sharing knowledge is related to profit-sharing satisfaction and organisational commitment. The data is collected from Finnish personnel funds, which are deferred profit-sharing schemes. Survey data from over 753 employees in 30 companies in different sectors were used. In studying the antecedents of profit-sharing knowledge, we found strong evidence that better profit-sharing communication and higher membership length increase profit-sharing knowledge. Furthermore, we find strong evidence that the relationship from profit-sharing knowledge to commitment is mediated by profit-sharing satisfaction. We discuss the implications for management.
The relationship between pay dispersion and the quits patterns of good, average, and poor performers was explored among a sample of motor carriers. Results showed that under high pay system communication, pay dispersion was negatively related to good performer quits when performance-based pay increases were emphasized, and positively related when they were not. The results for seniority-based pay increases were different. Under high pay system communication, pay dispersion was negatively related to average performer quits when seniority-based pay increases were emphasized, and the relationship was attenuated when they were not. Contrary to expectation, pay dispersion was not consistently related to quit patterns when pay system communication was low. Predictions regarding quit patterns of poor performers were not supported. Implications of the research are addressed and future research directions identified.
Using an equity theory framework, we hypothesized that performance, seniority, and gender differences in comparison others lead to perceived pay inequities, but that this relationship is moderated by an explanation of the pay system. A policy-capturing methodology was used. We found that performance and seniority differences are related to perceived pay inequities, but these perceived inequities were less pronounced when the pay system was explained to employees. Interestingly, we did not find any evidence of gender effects in perceived pay inequities. These results are discussed in terms of new developments in integrating procedural-justice and distributive-justice domains.
The attitudes of 101 bank employees were measured before and after the implementation of an earnings-at-risk (EAR) incentive pay plan which reduced base pay and increased employee risk and uncertainty with respect to total pay. Pay outcome satisfaction and pay process satisfaction both declined significantly over time, but the decrease in pay outcome satisfaction was the greater of the two. An examination of pay satisfaction antecedents at both points in time revealed relatively stable across-time relationships and provided information about some of the reasons for the changes. Perceived reward-to-effort ratio, which declined significantly over time, influenced both dimensions of pay satisfaction at both points in time. Perceived understanding of the pay system, which also declined over time, had a somewhat greater influence on pay process satisfaction than on pay outcome satisfaction, particularly at Time 2. In contrast to actual pay levels, changes in incentive and base pay amounts added more explained variance to the pay outcome satisfaction regression model. The study points out the potential for negative employee reactions to EAR incentive plans, and indicates that managers must ensure that employees understand these systems and feel that EAR plans will reward them equitably for their efforts.
Amazon's Mechanical Turk (MTurk) is a relatively new website that contains the major elements required to conduct research: an integrated participant compensation system; a large participant pool; and a streamlined process of study design, participant recruitment, and data collection. In this article, we describe and evaluate the potential contributions of MTurk to psychology and other social sciences. Findings indicate that (a) MTurk participants are slightly more demographically diverse than are standard Internet samples and are significantly more diverse than typical American college samples; (b) participation is affected by compensation rate and task length, but participants can still be recruited rapidly and inexpensively; (c) realistic compensation rates do not affect data quality; and (d) the data obtained are at least as reliable as those obtained via traditional methods. Overall, MTurk can be used to obtain high-quality data inexpensively and rapidly.
© The Author(s) 2011.
This article is based on some of the findings of a major research study just published by WorldatWork (formerly American Compensation Association) entitled The Knowledge of Pay Study: E-mails from the Frontline. Surveying more than 6,000 managers and employees in 26 major U.S. and Canadian organizations, the study found close connections between employees' knowledge of their organization's pay structure and their ability to align their own behaviors and goals to those of the organization—leading them to feel a greater sense of company loyalty and to contribute to the effectiveness of the organization. But it also found that such knowledge is far from universal, and identifies the gaps that need to be filled. © 2002 Wiley Periodicals, Inc.
The consequences of pay fairness perceptions are rarely explored, in part because of the lack of a compelling theory which relates pay attitudes directly to distal health and behavioural outcomes. We propose financial need as a potential moderator of the relationship between pay fairness and employees' physical health, psychological health, and work-related behaviours. Differential exacerbating and attenuating effects are predicted for various outcomes. In a longitudinal study of 651 employees of five American mid-western organizations, exacerbation predictions were strongly supported in cross-sectional analyses for life satisfaction, depression, and somatic complaints. Attenuation predictions received support cross-sectionally and longitudinally for job search intent, but were not supported for performance, absenteeism, or voluntary turnover. The importance of these results for understanding pay dynamics and for outlining mid-range theories is highlighted.
In this research, the roles of workplace justice, achievement striving behavior and pay satisfaction were used to predict prosocial behaviors. A total of 354 individuals from a consumer products company provided data for this research. Results suggest that achievement striving accounted for unique variance in in-role behavior. Perceived fairness in skill-based pay's certification process showed positive associations with extra-role and in-role behaviors. In support of previous research, pay satisfaction also provided unique contribution to both extra-role and in-role behaviors.
Two studies examined the relationship between actual pay and distributive and procedural justice, and the extent to which these perceptions were related to two important pay satisfaction dimensions, pay level and pay raise, and ultimately, impacted turnover. For each study the measures of pay and justice variables were obtained on a cross-sectional basis, while the measure of turnover was necessarily lagged. Results showed that distributive justice mediated the relationship between pay and both pay level satisfaction and pay raise satisfaction. Furthermore, distributive justice was a stronger predictor of pay level satisfaction; whereas procedural justice was a stronger predictor of pay raise satisfaction. Procedural justice also played a moderating role in Study 2. The study also showed that only pay raise satisfaction was significantly and negatively related to turnover in Study 1, and to turnover via turnover intention in Study 2. Results support the value of considering pay satisfaction as multidimensional when evaluating justice issues in a compensation context. Copyright copyright 2005 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR] Copyright of Journal of Organizational Behavior is the property of John Wiley & Sons, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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This study helps to fill a significant gap in the literature on organizations and inequality by investigating the central role of merit-based reward systems in shaping gender and racial disparities in wages and promotions. The author develops and tests a set of propositions isolating processes of performance-reward bias, whereby women and minorities receive less compensation than white men with equal scores on performance evaluations. Using personnel data from a large service organization, the author empirically establishes the existence of this bias and shows that gender, race, and nationality differences continue to affect salary growth after performance ratings are taken into account, ceteris paribus. This finding demonstrates a critical challenge faced by the many contemporary employers who adopt merit-based practices and policies. Although these policies are often adopted in the hope of motivating employees and ensuring meritocracy, policies with limited transparency and accountability can actually increase ascriptive bias and reduce equity in the workplace.
No one seemed to think Treece McDavitt was a malevolent employee. "Just mischievous," one person said. Whatever her motivation, the day before Treece was to leave RightNow!, an off-price women's fashion retailer, the 26-year-old computer wizard accessed HR's files and e-mailed employees' salaries to the entire staff. Now everyone knows what everyone else is making; they are either infuriated that they are making too little or embarrassed that they are making too much. Salary disparities are out there for everyone to see, and CEO Hank Adamson has to do something to smooth things over. Hank's trusted advisers talk extensively with the CEO about his options, ultimately coming down on two sides. Charlie Herald, vice president of human resources, takes a "You get a lemon, you make lemonade" approach: keep making the salaries public to ensure fairness and to push employees to higher performance, he advises. Meanwhile, CFO Harriet Duval sees the need for damage control: apologize, clean up the company's compensation system, and continue to keep--or at least try to keep--salaries private, she says. Should Hank side with Charlie or Harriet? Or perhaps find a compromise between their two views? What should he do about this serious salary debacle? Four commentators offer their advice on the problem presented in this fictional case study.