Perceptions of politics and fairness in merit pay

Abstract

Purpose: Employee perceptions of politics and fairness were studied in a work setting where a new merit pay system had recently been implemented.Design/methodology/approach: Based on the literature on organizational politics, equity, procedural justice, and social exchange theory, we expected that employee perceptions of politics and fairness are associated with the perceptions of merit pay effectiveness. The results are based on employee survey responses from three governmental organizations (N=367) that had implemented analogous merit pay systems. Findings:Hierarchical moderated regression results indicated that perceptions of politics and fairness distinctively and interactively predicted whether the pay system was perceived effective in achieving its objectives. The results suggest that some forms of politics in performance appraisals (e.g., compression) might be perceived less detrimental than others (e.g., favoritism). In a high politics environment, the pay system effectiveness varied as a function of the level of distributive justice. Voice in the pay system development only mattered in a situation where there was a low level of organizational politics. Research implications/limitations:One of the main limitations of this study is its reliance on cross-sectional data. Future research should complement employee perceptions about pay system effectiveness with objective data from the organizations studied. Research on the effect of contextual factors, such as national culture on the motives in and reactions to organizational politics, is desired. Practical implications:The result suggests that the adopted merit pay systems were not ineffective or detrimental per se, but that the effectiveness varied as a function of the established political and fairness climates at different levels of the organization. Originality/value:This study contributes to the discussion on what are the conditions under which politics and fairness are antithetical, and when they are interactively associated with outcomes.

Perceptions of Justice in Extrinsic Reward Patterns

“…Special private bonuses in the manufacturing business reveal employee perceptions of interpersonal justice from the supervisor-subordinate relationship related to direct experiential rewards. These results are in agreement with the notions of Andersson-Strberg et al, 77 Salimäki and Jämsén, 78 St-Onge, 79 and van Dijke et al 80 that employees perceive distributive, procedural and interpersonal justice in direct rewards.…”

Mediation Role of Organizational Commitment in the Relationships of Organizational Politics and Job Involvement and Employee Performance

“…In other words, in a country like Pakistan, most of the employees are not completely aware about organizational politics and its influence on their job performance and involvement. Previous studies support our findings suggesting that organizational politics and employees' commitment are negatively related and that employees' commitment and performance are positively related and the negative relationship between organizational politics and job involvement (Salimaki and Jamsen, 2010;Karadal and Arasli, 2009;Chang et al, 2009;Vigod, 2000). Based on the above findings, it can be concluded that public sector employees' of Pakistan are affected by organizational politics.…”

“…The potential contribution of this study exists in the new direction which improving the employee performance and involvement by increasing their commitment level with organizations in public sector arena. Organizational politics and employees' commitment are positively related with satisfaction and employees' commitment and performance are also positively related (Salimaki & Jamsen, 2010). The objective of this study is to find the impact of organizational politics on employee's job performance, employee's job involvement and employee but positively effected the higher standard employees (Witt, 2001).…”

Decoupling Compensation Practices from Human Resource Management

“…The Cronbach's alpha reliability coefficient of the scale was .86. A similar perceptual measure of compensation system effectiveness has been used in previous studies (e.g., Balkin and Gomez-Mejia 1990;Salimäki and Jämsén 2010).…”