Organizational justice perceptions and pay level satisfaction

Abstract

PurposeThe purpose of this paper is to compare the relative importance or effects of individual equity, external equity, internal equity, procedural justice, and informational justice on pay level satisfaction.Design/methodology/approachThe paper uses a policy‐capturing methodology to determine the importance of the five factors and considers both group analyses and individual analyses of the data.FindingsOf the three types of equity, individual equity was the most important factor on pay level satisfaction. External equity and the three other factors were important for many individuals, and this was shown through the individual analyses.Research limitations/implicationsThe number of scenarios given to each participant was limited due to possible fatigue.Practical implicationsThe findings will help managers make judgments on how to respond to conflicts between internal alignment and external market conditions. Knowledge of which factors are most important will help managers create more effective compensation programs.Originality/valueThis is the first multi‐justice study to find the relative effects of justice perceptions on pay level satisfaction, and it includes informational justice.