Abstract
Two‐tier wage structures occur when employees hired after a certain date are placed on a substantially lower pay schedule than the schedule for previously hired employees. This study examined how internal and external pay comparisons related to attitudes toward pay among low‐ and high‐tier employees in a retail food chain with two‐tier wage structure. For the low‐tier group, comparisons with low‐ and high‐tier referents, and to a lesser extent, part‐time referents and referents at other places where the respondents might obtain work predicted pay satisfaction. For the high‐tier group, comparisons with high‐tier referents and referents in heavy industries (automobile or steel) predicted pay satisfaction. The results are consistent with the notion that both groups were concerned with pay equity relative to referents with similar earnings, and with deprivation relative to referents with higher earnings.
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