Just What I See? Implications of Congruence Between Supervisors’ and Employees’ Perceptions of Pay Justice for Employees’ Work-Related Attitudes and Behaviors

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.

Motivating and Demotivating Effects of Performance-Related Pay in Swedish Public Sector Organizations

“…However, the main contribution of the present study is that it shows the importance of employee preparations, the usage of explicit criteria in performance appraisal/wage determination, the quality of the performance appraisal dialogue and feedback, and the evaluation style of the manager in the appraisal. To some extent, our findings are in line with theoretical reasoning and empirical indications scattered in various previous research (Choi & Whitford, 2017; Favero et al, 2016; Gerhart & Fang, 2015; Glassman et al, 2010; Lee, 2019; Malmrud et al, 2020; Oh & Lewis, 2009; Schay & Fisher, 2013). However, these variables have seldom been at the center of the analysis.…”

“…Theoretically, the results confirm aspects of both justice-perceptions (Colquitt, 2001;Malmrud et al, 2020), and SDT (Gerhart & Fang, 2015;Ryan & Deci, 2000). Employee motivation increased with information and fair feedback, and through a good dialogue regarding performances and future possibilities.…”

“…In addition, the results confirm previous research showing that perceived injustice in the appraisal and wage-setting principles and practices decrease motivation and increase demotivation (cf. Colquitt, 2001; Kim & Holzer, 2016; Malmrud et al, 2020; Stråberg, 2010).…”

“…In Sweden, research on PRP-related issues has focused on attitudes toward PRP pay and causes of justice perceptions and pay satisfaction rather than on motivation. However, justice perceptions have strong effects on pay satisfaction and organizational commitment, and feedback from line managers was found to be important (Malmrud et al, 2020; Stråberg, 2010).…”

What helps managers being fair? Predicting managers’ self-reported justice enactment during pay setting using the ability-motivation-opportunity framework

“…Brebels et al, 2011;Hoogervorst et al, 2013;Zapata et al, 2013). In general, research has found substantial correlations between supervisors' self-reported justice enactment and employees' justice perceptions (Huang et al, 2017;Zapata et al, 2013), although some studies have also found manager reports of enacted justice to be unrelated to their subordinates' perceptions of justice (Malmrud et al, 2020).…”