Abstract
Perceiving a pay system as just has been suggested to be a precondition for individualized pay to have a motivating effect for employees. Supervisors’ enacted justice is central for understanding the effects that pay setting can have on employee attitudes and behavior. Yet, enacted justice has received little research attention, in regard to both organizational justice and pay-related topics. This study examines the effects of employees’ perceived pay justice and supervisors’ enacted justice, as well as the degree of congruence, on employees’ work-related attitudes and behaviors. Questionnaire data from employees (N = 566) matched with data from their pay-setting supervisors (N = 208), employed in a Swedish manufacturing company, were analyzed. Results of polynomial regression with response surface analysis show that employees’ perceptions of pay justice were important for their work-related attitudes and behaviors and that supervisor–employee congruence regarding pay justice was positively related to employees’ attitudes and behavior, particularly when the ratings concerned high levels of justice. The results not only highlight the importance of developing a pay system that is perceived as just by employees but also emphasize the importance of reaching a congruence between supervisors’ and employees’ perceptions of high fairness, as this has positive implications for employees’ attitudes and behaviors.
Highlights
Organizations need to attract knowledgeable and skillful employees and to retain those who are satisfied and motivated to perform
Justice perceptions have almost exclusively been studied based on the various justice dimensions, and the findings indicate that employees who perceive a higher degree of justice demonstrate higher degrees of job satisfaction, organizational commitment, and job performance, as well as a stronger desire to remain working in the organization (Cohen-Charash and Spector, 2001; Colquitt et al, 2001, 2013; Rupp et al, 2014)
Studies on organizational justice have found that a high level of perceived justice is associated with higher job satisfaction, job performance, intention to stay, and organizational commitment (Colquitt et al, 2001, 2013; Rupp et al, 2014), and pay justice has not been studied to the same extent, there are indications that it is, related to these outcomes (Tekleab et al, 2005; Andersson-Stråberg et al, 2007)
Summary
Organizations need to attract knowledgeable and skillful employees and to retain those who are satisfied and motivated to perform. Individualized performance-based pay setting is a tool that organizations use to try to increase the motivation and performance of its employees. The possible specific effects of individualized pay setting are much debated in research (e.g., Gerhart and Fang, 2014), it has been utilized to improve employee performance as well as to attract and retain skilled and desirable personnel (Heneman et al, 2000). The functioning of individualized performance-based pay setting is mainly the responsibility of the supervisors, whose actions shape the employees’ justice perceptions regarding the pay process. Fairness in regard to individualized pay setting concerns how just an employee perceives his or her pay to be and how just the pay-setting process as a whole is, including the treatment and actions of the supervisor
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
