Modelling the role of pay equity perceptions: A field study

Abstract

Data were collected on 365 managers representing five managerial levels in order to provide an initial field test of an equity model based on Adams (1963) and Lawler (1971). Exploratory path analysis was performed using LISREL VI to identify the primary paths affecting equity perceptions and those leading to the outcomes of job performance and voluntary turnover. The primary variables influencing pay equity were salary level, job level, pay valence, and prior job performance. The data suggested that pay equity perceptions have an impact on voluntary turnover but not necessarily on job performance. The impact on turnover, however, was indirect, through its influence on pay satisfaction, job satisfaction, organizational commitment, and intent to leave. The major predictors of job performance were prior job performance and salary level.