Fairness perceptions and satisfaction with components of pay satisfaction

Abstract

Purpose

The purpose of this paper is to integrate two streams of research and investigate the associations of different forms of justice perceptions on attitudinal reactions to four components of compensation: pay level, pay raises, benefits, and structure and administration In doing so, it responds to calls for more primary studies linking interactional justice perceptions to pay satisfaction.

Design/methodology/approach

In total, 151 technology professionals employed at an international consulting company were surveyed to investigate hypotheses. Structural equation modeling was used to test the model.

Findings

As hypothesized, distributive justice was related to satisfaction with pay level, procedural justice to satisfaction with benefits, raises and pay structure and administration, and informational justice to pay level and structure and administration.

Research limitations/implications

The primary limitations of this research are the cross‐sectional research design and a single source of survey data.

Practical implications

Since pay dissatisfaction is significantly related to numerous employee outcomes and attitudes toward pay meditate the relationship between compensation and work outcomes, understanding the role of perceived justice may facilitate managers' ability to influence pay satisfaction. HR policies and managers' behaviors can influence pay satisfaction as much or more than actual pay (distributive justice). For example, results for informational justice suggest pay satisfaction can be increased by clearly and candidly explaining and communicating the organization's procedures and processes.

Originality/value

This paper is the first to examine associations between the four‐factor justice model and components of pay satisfaction and demonstrate that informational justice adds additional explained variance for pay level, raises, and structure and administration.

Citation

Jawahar, I.M. and Stone, T.H. (2011), "Fairness perceptions and satisfaction with components of pay satisfaction", Journal of Managerial Psychology, Vol. 26 No. 4, pp. 297-312. https://doi.org/10.1108/02683941111124836