An under-met and over-met expectations model of employee reactions to merit raises

The authors developed a model of how raise expectations influence the relationship between merit pay raises and employee reactions and tested it using a sample of hospital employees. Pay-for-performance (PFP) perceptions were consistently related to personal reactions (e.g., pay raise happiness, pay-level satisfaction, and turnover intentions). Merit pay raises were strongly related to reactions only among employees with high raise expectations and high PFP perceptions. The interactive effects of under-met/over-met expectations and PFP perceptions were mediated by the extent to which participants saw the raise as generous and they were happy with the raises they received. The authors discuss the implications of these findings for expectation-fulfillment theories, merit pay research, and the administration of incentives.     

Reactions to merit pay increases: a longitudinal test of a signal sensitivity perspective

The relationships among merit pay raises, trait positive affectivity (PA), and reactions to merit pay increases (pay attitudes and behavioral intentions) were explored in a longitudinal study of hospital employees. Drawing on signal sensitivity theory, the authors expected that PA would moderate the relationship between merit pay raise size and reactions to the increase such that pay raise size would be more strongly related to pay attitudes and behavioral intentions among those low in PA. Results strongly supported the predictions in the case of reactions to the raise amount (happiness and effort intentions) but not for pay level satisfaction. Implications of the results and directions for future research are identified.     

Meritocracy and opposition to affirmative action: making concessions in the face of discrimination

Typically, people who strongly endorse the merit principle and believe that outcomes should be given to those most deserving oppose affirmative action (AA) programs that violate this principle. However, how do they respond to AA when faced with a great deal of workplace discrimination? The authors hypothesized that people who care strongly about merit should be motivated to combat discrimination because it biases the assessment of merit. Consequently, these individuals should make concessions for AA. The authors found support for their hypothesis when investigating (a) participants' preexisting perceptions of workplace discrimination and (b) experimentally induced perceptions of discrimination. They discuss the implications of these results for the psychology of meritocracy and for resistance to AA.     

PREDICTING THE SALARY SATISFACTION OF EXEMPT EMPLOYEES

This study examined the degree to which salary satisfaction can be predicted using company-maintained information commonly available to salary administrators. Predictors included years of continuous service, educational level, annual performance rating, an estimate of career potential, monthly salary, a measure of the most recent salary increase, and employee gender. A variety of hypotheses derived from Lawler's (1971) model of pay satisfaction also were tested, focusing on the relative contribution of perceived performance, perceived job demands, certain non-monetary outcomes, and external and internal pay equity. The research utilized a sample of managerial, professional, and technical employees from a large national oil company. The results suggest that without the inclusion of a variety of employee perceptions, only a small proportion of pay satisfaction can be accounted for, with salary and sex representing the primary objective predictors. Perceived performance, perceptions regarding supervision, advancement opportunity, and the company's benefit package, and both external and internal pay equity, were related to pay satisfaction in the direction predicted by Lawler's model. The implications of not being able to estimate pay system perceptions using company-maintained sources of information are discussed along with the results supporting certain key components of Lawler's model of pay satisfaction.     

When What You Want is What You Get: Pay Dispersion and Communal Sharing Preference

The question of whether pay structures should be compressed or dispersed remains unanswered. We argue that pay dispersion can yield uncertainty regarding others' intentions and behaviors; as a result, individuals take a greater risk trusting their group members as pay spreads widen. Accordingly, we explore the conditions under which individuals are more willing to take this risk by viewing their group members as trustworthy even when pay is dispersed. Specifically, preferences for how relationships and resources should be structured in groups should help to determine when pay dispersion relates to trustworthiness perceptions. We hypothesise that the cross‐level interaction between preferences for communal sharing (Level 1)—that is, the extent to which individuals prefer communal, egalitarian structures in their groups—and pay dispersion (Level 2) is associated with trust perceptions. Data drawn from a sample of university professors support our hypothesised cross‐level interaction, and show that when pay dispersion is greater, individuals perceive their group members as more trustworthy only when they have weak preferences for communal sharing. Our results signify the importance of individual attributes to understanding pay dispersion's effects, and show that trust is fostered when preferences and pay conditions are aligned.     

Procedural and interpersonal fairness moderate the relationship between outcome fairness and acceptance of merit pay

An organizational field study (N = 257) investigated employees' acceptance of a new merit pay system as involving an assessment of whether merit pay can make their earnings more fair, compared to their earnings in the current, seniority-based pay system. We expected that improvement of unfair earnings, and consequently acceptance of merit pay, is considered likely when existing procedures that produce these earnings are unfair, because merit pay improves such procedures. We also expected improvement of unfair earnings, and increased merit pay acceptance, to be likely when employees anticipate fair performance evaluation in a new system, as indicated by fair interpersonal treatment by their supervisor. Results showed that procedural and interpersonal fairness in the existing pay system indeed moderated the relationship between fairness of current outcomes and merit pay acceptance as predicted. Implications for the introduction of merit pay in organizations and for our understanding of the different roles of procedural and interpersonal fairness in outcome evaluations are discussed.     

A TEST OF THE GROUP VALUES AND CONTROL MODELS OF PROCEDURAL JUSTICE FROM THE COMPETING PERSPECTIVES OF LABOR AND MANAGEMENT

A path model was developed to determine the predictive power of the group values (Lind & Tyler, 1988) and the self-interest/control (Thibaut & Walker, 1975) models in the justice judgments of three state impasse resolution procedures for teacher bargaining disputes. Surveys were returned by 90 school superintendents and 74 union presidents from districts that had used the procedures during the last contract negotiations. The group values variables of perceived neutrality of, and trust in, third parties were most predictive of procedural justice judgments. Process control was also predictive of procedural justice judgments, whereas decision control was not. Neither model was predictive of distributive justice judgments. Further, the path analysis clearly indicates the importance in this context of examining procedural and distributive justice from the competing perspectives of labor and management. Labor/management affiliation was strongly related to trust in third parties, perceptions of relative pay, and overall distributive justice judgments.     

Self-rated performance and pay satisfaction,merit increase satisfaction,and instrumentality beliefs in a merit pay environment

The relationship of self-rated performance to pay level satisfaction, merit increase satisfaction, and instrumentality beliefs in a merit pay environment is investigated. Self-rated performance exhibited a significant negative relationship with all three variables beyond that accounted for by control variables. Implications and suggestions for future research are discussed.     

THE RELATIONSHIP BETWEEN PAY-FOR-PERFORMANCE PERCEPTIONS AND PAY SATISFACTION

A study was conducted with 104 hospital employees to assess the relationship between pay-for-performance perceptions and pay satisfaction. Unlike previous research examining this relationship, a multi-item measure of pay-for-performance perceptions and a multidimensional measure of pay satisfaction were used. As hypothesized, the results indicated a positive relationship between pay-for-performance perceptions and pay-raise satisfaction, pay-level satisfaction, and overall pay satisfaction even after the effects of salary level, salary increases, performance ratings, job tenure, job satisfaction, and promotions were controlled. The importance of gathering perceptual data on characteristics of the pay system believed to have differential relationships with the subdimensions of pay satisfaction are discussed.     

Cooperation as a signal of genetic or phenotypic quality in female mate choice? Evidence from preferences across the menstrual cycle

Previous research highlighting the role sexual selection may play in the evolution of human cooperation has yet to distinguish what qualities such behaviours actually signal. The aim here was to examine whether female preferences for male cooperative behaviours are because they signal genetic or indirect phenotypic quality. This was possible by taking into account female participants' stage of menstrual cycle, as much research has shown that females at the most fertile stage show greater preferences specifically for signals of genetic quality than any other stage, particularly for short-term relationships. Therefore, different examples of cooperation (personality, costly signals, heroism) and the mate preferences for altruistic traits self-report scale were used across a series of four experiments to examine females' attitudes towards cooperation in potential mates for different relationship lengths at different stages of the menstrual cycle. The results here consistently show that female fertility had no effect on perceptions of cooperative behaviour, and that such traits were considered more important for long-term relationships. Therefore, this provides strong evidence that cooperative behaviour is important in mate choice as predominantly a signal of phenotypic rather than genetic quality.     

A closer look at the relationship between justice perceptions and union participation.

In this study, a series of nested models was tested to assess the extent to which the relationship between process-related justice and union participation is mediated by perceived union support and union commitment. Members of a steelworkers' local (N = 615) participated in the study. Fit indices most strongly supported a fully mediated model. Unlike previous research, process-related justice was operationalized as 2 distinct variables: procedural and interactional justice. Interactional justice was found to have a substantially stronger relationship with support perceptions than procedural justice. Results also indicated union support accounted for a greater amount of unique variance in union commitment than perceived union instrumentality. The results are discussed in relation to trust theory and the generalization of organization science across different types of organizations.     

SUPERVISORY AND EMPLOYEE CHARACTERISTICS AS CORRELATES OF EMPLOYEE SALARY INCREASES

Previous research on merit pay has focused on the context in which merit decisions take place and on characteristics of the employee. In the present study it was hypothesized that not only do employee characteristics influence merit increases, but so do characteristics of the employee's supervisor. The results from 175 employees in a midwestern manufacturing plant showed that 11% and 24% of the variance in employee salary increases were attributable to supervisory and employee characteristics, respectively. These results suggest that supervisory characteristics should be included in future research involving correlates of employee salary increases and by organizations when auditing the administration of merit pay plans.     

Teachers do not Deal in Widgets

Although the use of merit pay, incentive pay, bonus pay, and job promotion are well-established measures in the private or corporate sector of American society, few examples of successful teacher merit pay systems exist. In 1983, the Eastern Washington University Department of Education surveyed six major private corporations to determine whether corporate merit pay programs could be applied to teachers and educational institutions. Survey findings suggest several reasons why merit pay programs for teachers will probably fail: (a) lack of monetary goals; (b) the necessity for subjective evaluation, which requires multiple measurement devices, extensive supervision, and time; (c) the absence of a many-tiered corporate structure in most educational institutions; and (d) increased supervisory direction that could stifle creativity and flexibility.     

Health problems and quitting among female "temps"

The current study focused how individual contract preference among female agency "temps" was related to perceptions of the job, and to somatic complaints and distress and quitting. The effort reward model by (Siegrist, 1996) was used as a general, theoretical framework guiding the choice of relevant job features. The mediating role of job perceptions on the relationship between contract preference and the outcomes was tested, controlling for several possible confounding factors. Data came from questionnaires, answered by 227 female employees, together with records of turnover provided by the employing agency. Results supported a model where contract preferences appeared to be negatively related to both health outcomes, and the relation was mediated by perceptions of work load and social support. Contract preferences were strongly related to intentions to quit, but not to actually leaving the job within 6 months.     

A Longitudinal Study of Shop Stewards’ Union Commitment and Perceptions of Union Instrumentality and Support

Although previous studies have hypothesised that union perceptions (e.g. perceived union instrumentality, perceived union support) predict members’ commitment to the union, these relationships have only been tested cross‐sectionally. Drawing on attitude–behavior consistency theory, this study hypothesised that union commitment may be an antecedent of union perceptions. Cross‐lagged structural equation models with one year separating waves of data collection (N = 676) provided the most support for a model suggesting that commitment precedes perceptions of the union. These results point to the need to consider new models of union commitment for shop stewards and, potentially, union members.     

Sex Effects in Performance--Related Judgments

This study examined the relationships among objective performance, performance ratings, and pay allocations made by male and female managers. Because rater sex has been found to affect performance ratings and pay allocations, but little research has explored the causes of these sex differences, this study explored the effects of contextual factors that may moderate differences between the performance ratings and pay allocations of male and female raters. Two hundred twenty-nine managers assigned performance ratings and merit pay allocations to performance profiles that varied in levels of objective performance. It was found that: (a) sex effects on performance ratings were moderated by contextual variables, and b) sex and objective performance did not influence merit pay allocations independent of their separate effects on performance ratings.     

Influence of prior involvement on employees' ratings

Surveys show that the majority of firms provide merit pay to outstanding employees. Despite the widespread use of merit pay programs, there is no consensus as to their effectiveness. While some plans have been successful in motivating employees to achieve higher performance, others have caused employees' dissatisfaction and discouragement. One previously unexplored area in the implementation of merit pay systems is the effect of the decision-maker's prior involvement with the employee on the decision to grant merit. The purpose of this paper was to examine whether hiring an employee leads to larger merit allocations despite evidence that the standards for merit were not met. 101 accounting students participated to assess the influence of hiring on subsequent merit allocations. Analysis indicated that prior involvement does bias ensuing merit decisions.     

PAY SATISFACTION AND ORGANIZATIONAL OUTCOMES

Using multi level and multi method data, we investigated the relationship between pay satisfaction and outcomes at the organizational level of analysis. Individual-level survey data on pay satisfaction (including satisfaction with pay level, satisfaction with pay structure, satisfaction with pay raises, and benefits) were collected from 6,394 public school teachers. Organizational-level outcome data, both survey and archival, were collected from the 117 public school districts employing these teachers. With respect to its influence on organizational outcomes, pay satisfaction was positively related to school district-level academic performance and negatively related to average teacher intention to quit. We also explored the relationship between district-level union satisfaction and pay satisfaction, which was found to be positive. We discuss implications of our findings for for-profit companies that are knowledge based and human capital intensive (e.g., the service sector) and address possible future directions for research on pay satisfaction.     

Development of a turnover model that incorporates a matrix measure of valence-instrumentality-expectancy perceptions

A sample of 365 managers of a full service U.S. restaurant chain was used to test a model incorporating a matrix measure of valence-instrumentality-expectancy (VIE) perceptions leading to the outcomes of job performance and turnover. This study used Hollenback's (1979) method of computing motivational force scores deriving from VIE perceptions. The model hypothesized one path from VIE to pay satisfaction, another from VIE to job performance, and a third set of links from job satisfaction to intentions to leave the organization to voluntary turnover. The results supported a revised model including the major hypothesized path from VIE perceptions to pay satisfaction to job satisfaction to intent to leave to voluntary turnover. In addition, the job performance to turnover paths were supported. The most noteworthy paths not receiving support were from VIE perceptions to job performance; however, there was an unhypothesized, indirect effect of VIE perceptions on job performance through pay satisfaction.     

Factors Influencing Employee Beliefs That Pay Is Tied to Performance

The unique relationship of perceived pay level equity, perceived appraisal accuracy, merit increase satisfaction, trust in supervisor, and trust in top management to employee beliefs that pay is tied to performance was investigated in a sample of 658 managerial, professional, and clerical employees. Pay level equity, merit increase satisfaction, and trust in top management exhibited a significant unique relationship. Post hoc analysis found appraisal accuracy exhibited a significant unique relationship with belief that pay is tied to performance among employees receiving a lower or higher than expected performance appraisal, but not among employees receiving the expected performance appraisal.