The Significant Factors Influencing Individual’s Perceptions of Pay Gap

Abstract

Various studies have shown that there exist gender-related inequalities in employee compensation. Yet, individuals may also develop affective and behavioural outcomes based on their perceptions of whether they experience such inequalities or observe such inequalities (dis) favouring others. This paper seeks to examine the different factors that could be linked to individuals' pay gap perceptions. The study aims to analyze how demographic factors can significantly impact individuals' perceptions of the pay gap by looking at the relationship between the two variables, where the demographic factors are the independent variable and the perceptions become the dependent variable. The survey was made by adapting from two previous studies about gender discrimination. Hypotheses were tested by utilizing a hierarchical linear regression through SPSS with a sample size of 217 participants from 3 continents: Europe, Asia, and America. Findings showed that gender, age, marital status and equity sensitivity are significantly linked to pay gap perceptions. Specifically, the study found that individuals reported higher pay gap discrimination against their own gender and benefitting the opposite gender. The limitations of this study include its small sample size and cross-sectional design, which affects the generalizability of its findings. This research contributes to the literature on employee compensation, as it features some factors that are linked to individual pay gap perceptions. Theoretically, the paper suggests that self-serving bias and gender role theories potentially influence individuals’ wage and justice perceptions. The paper also provides insights that could help HR professionals design better compensation and communication practices.