Performance-based pay is fair, particularly when I perform better: differential fairness perceptions of allocators and recipients

Abstract

We examined in two experiments the impact of the roles that people enact (allocator or recipient) and performance attributions (talent or effort) on fairness perceptions of pay systems (performance-based pay or job-based pay). To test the relative effects of the roles that people enact, in the control conditions, participants were asked to evaluate the fairness of both allocation norms from ‘behind a veil of ignorance’ (Rawls, 1971). As hypothesized, the results consistently demonstrate that whereas recipients were biased in their fairness perceptions, allocators tended to be non-biased in their fairness perceptions. The self-interest bias among recipients was particularly strong when talent rather than effort attributions were imposed on them. Copyright © 2005 John Wiley & Sons, Ltd.