On the Psychology of the Advantaged: How People React to Being Overpaid

Abstract

Based on the idea that overpaid people are in conflict between hedonic principles (i.e., what makes them pleased) and what they believe to be right, two studies tested the hypothesis that it should be relatively difficult for people to make satisfaction judgments regarding outcomes in which they are being advantaged. In line with this hypothesis, Study 1 demonstrated that response latencies of satisfaction judgments were longer when participants were being overpaid, compared to when they were underpaid or equally paid. Study 2 extended these findings by demonstrating that people required more time to make satisfaction judgments when they were overpaid in the context of a close relationship (i.e., in which the conflict between hedonic and concerns for the other's need should be stronger) than when overpaid in the context of a non-close relationship. Theoretical implications regarding the social-cognitive processes underlying reactions to overpayment are discussed.

The influence of status on satisfaction with relative rewards

“…When the relationship was antagonistic, people did not care about the payoff of their opponent, as long as it was less than or equal to their own. Results by Peters et al (2008) support these findings: In their study, people were less satisfied with advantageous inequity when their opponent was a close friend compared to a stranger. This suggests that people take social context into account when rating one's satisfaction, with fairness considerations playing a bigger role when the relationship with the other person is positive.…”

“…A number of studies show that, accordingly, satisfaction with advantageous inequity (i.e., receiving more money than another person) is higher than satisfaction with disadvantageous inequity (i.e., receiving less money than another person); (Buunk and van Yperen, 1989; van den Bos et al, 1997, 1998, 2006; Peters et al, 2008). In line with this, when both my colleague and I would receive a salary increase for the same work, I should be more satisfied than in either of the two aforementioned examples: I receive money and the monetary allocation is fair (e.g., Fehr and Schmidt, 1999; Falk and Fischbacher, 2006; van den Bos et al, 2006).…”

“…So far, only a few studies have investigated the influence of social context, such as the relationship to the person with whom the income comparison takes place (Loewenstein et al, 1989; Gächter and Riedl, 2006; Peters and van den Bos, 2008; Peters et al, 2008). Loewenstein et al (1989) showed that this relationship indeed does affect satisfaction: In friendly relationships, people disliked receiving a higher payoff than their opponent.…”

Equity theory and social justice

“…When people are profiting from their work and know they are receiving just what Journal of Management, Spirituality & Religion they deserve in status, money, and services, they feel "content" and "happy." When receiving considerably more than they deserve, they feel "shame," "guilt" and "unease" (Peters et al 2008). When receiving far less than they deserve, they feel "angry" and "resentful" (see Hatfield et al 1978;Sprecher 1986, for a compendium of this research).…”

The interactive effect of positive inequity and regulatory focus on work performance

“…Positive inequity can elicit conflicting experiences (Messick & Sentis, 1983;Peters, Van den Bos, & Karremans, 2008; Van den Bos, Peters, Bobocel, & Ybema, 2006). On the one hand, from a justice perspective, people feel uncomfortable about outcomes deviating from equity.…”