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Employee perspectives on individualized pay: Attitudes and fairness perceptions
Stockholm University, Faculty of Social Sciences, Department of Psychology. (Avdelningen för arbets- och organisationspsykologi)
2010 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The use of various types of individualized pay setting has increased dramatically in Sweden. In order for individualized pay to work as an incentive, the pay system has to be perceived as fair. This thesis focuses on the various subjective perceptions that arise in relation to individualized pay setting, since such perceptions may have consequences for employee attitudes and behavior. Using survey data from Swedish human service workers (Study I and II) as well as other public employees (Study III), the general aim was to shed more light on employees’ pay attitudes and fairness perceptions in connection with individualized pay setting. Study I examined some of the explanatory factors behind employee pay attitudes. The results showed that perceiving a clear connection between work results and pay, and perceiving a sound working climate, were both related to more positive attitudes towards the pay distribution process. Study II examined factors potentially associated with pay-related justice perceptions. The results demonstrated that perceptions of having sufficient feedback, proper information on pay criteria, gender equality, and lower workloads were connected with more favorable views of pay justice. Pay justice perceptions, in turn, appeared only to be marginally connected with employees’ work-related attitudes and behavior. Study III investigated whether women’s and men’s perceptions of the individualized pay-setting process differed. The results showed that both genders had a similar awareness of the organizational policies and goals. The women, however, reported much lower levels of pay-related gender equality than the men and perceived that men, overall, benefited more from individualized pay setting. In conclusion, employees’ perceptions of a well-functioning working climate, apparent links between work effort and pay, as well as perceived equal opportunities contribute to individualized pay systems being viewed as more fair.

Place, publisher, year, edition, pages
Stockholm: Department of Psychology, Stockholm University , 2010. , 70 p.
Keyword [en]
individualized pay setting, fairness, pay attitudes, gender differences, equal opportunities, pay system, work climate, justice perceptions
National Category
Psychology
Research subject
Psychology
Identifiers
URN: urn:nbn:se:su:diva-38308ISBN: 978-91-7447-025-3 (print)OAI: oai:DiVA.org:su-38308DiVA: diva2:309668
Public defence
2010-05-27, David Magnussonsalen (U31), hus 8, Frescati hagväg 8, Stockholm, 10:00 (Swedish)
Opponent
Supervisors
Available from: 2010-05-05 Created: 2010-04-08 Last updated: 2010-06-15Bibliographically approved
List of papers
1. Attitudes towards individualized pay among human service workers in the public sector
Open this publication in new window or tab >>Attitudes towards individualized pay among human service workers in the public sector
2005 (English)In: Change and quality in human service work: dedicated to the work of André Büssing / [ed] Christian Korunka & Peter Hoffmann, Munich: Rainer Hampp Verlag, 2005, 1, 67-82 p.Chapter in book (Other academic)
Abstract [en]

The work climate has gone through immense changes during the recent decades, due to industrial reformation, economic recessions, technical advancements, and an increased global competition (Howard, 1995). The so-called New Public Management movement has inspired many European countries and has among other things led to changes in the way that wages are distributed (Pfeffer, 1997; Wikman, 2001). Wage distribution systems partly based on individual performance are increasingly taking over traditional wage distribution systems in many organizations in Europe (OECD, 1995). Employers appear to have great expectations that individualized performance-based wages will bring about higher employee motivation and performance etc (Lawler, 1991). The aim of this study is to investigate attitudes towards individualized pay among human service workers in the public sector and try to identify some of the factors behind their attitudes. Questionnaire data show that employees with the most positive attitudes towards individualized pay already had part of their salary based on performance. A person’s attitude towards individualized pay also seems to be positively related to perceived workload and mental health complaints. Older employees and employees with longer tenure reported the most negative attitudes towards individualized performance based wages. This study contributes to a better understanding of some of the factors underlying attitudes towards individually based wages among human service employees.

Place, publisher, year, edition, pages
Munich: Rainer Hampp Verlag, 2005 Edition: 1
Series
Organizational Psychology and Health care, ISSN 1612-0531 ; 4
National Category
Psychology
Identifiers
urn:nbn:se:su:diva-37497 (URN)3-87988-915-5 (ISBN)
Available from: 2010-03-15 Created: 2010-03-08 Last updated: 2014-07-01Bibliographically approved
2. Perceptions of justice in connection with individualized pay setting
Open this publication in new window or tab >>Perceptions of justice in connection with individualized pay setting
2007 (English)In: Economic and Industrial Democracy, ISSN 0143-831X, Vol. 28, no 3, 431-464 p.Article in journal (Refereed) Published
Abstract [en]

Individualized pay is typically assumed to enhance employee work motivation, but a precondition for such beneficial effects is that employees perceive the pay-setting process to be fair. The aim of this study is to contribute to the understanding of the nature, determinants and consequences of pay justice. Questionnaire data, obtained from a Swedish nationally representative sample of nurses, provided support for distinguishing between distributive, procedural, interpersonal and informational justice. The results also showed that perceptions of pay justice were predicted by both work climate variables and factors related to the pay-setting procedure, even after controlling for demographic characteristics. Although pay justice had only marginal effects on employee work attitudes and behaviour when demographics, work climate and pay-related factors had been taken into account, justice was found to be an important goal in itself, given that a prerequisite for the success of any pay system is that it is perceived as fair.

Place, publisher, year, edition, pages
Uppsala: Sage Publications, 2007
Keyword
fairness, gender equality, motivation, performance review, salary
Identifiers
urn:nbn:se:su:diva-37501 (URN)10.1177/0143831X07079356 (DOI)000249099500006 ()
Available from: 2010-03-15 Created: 2010-03-08 Last updated: 2010-04-08Bibliographically approved
3. Gender Equality and the Individualised Pay-Setting Process
Open this publication in new window or tab >>Gender Equality and the Individualised Pay-Setting Process
2008 (English)In: Reward Management: Facts and Trends in Europe / [ed] M. Vartiainen, C. Antoni, X. Baeten, N. Hakonen, R. Lucas, & H. Thierry, Lengerich: Science Publishers , 2008, 1st, 48-68 p.Chapter in book (Other academic)
Abstract [en]

The practice of individualized pay has increased through Europe during the last decades. In order for individualized pay setting to bring about intended positive outcomes such as employee motivation and productivity, the pay setting should be considered fair. Unequal pay distribution among men and women may consequently be a threat to the pay system’s incentive effect. We have investigated differences between men’s and women’s perceptions and attitudes toward a number of factors involved in the individualized pay-setting process. The results suggest that although both genders seem to be satisfied with the system itself, there are substantial differences regarding how equal and fair men and women perceive the pay distribution to be, as well as who benefits from it.desiring  Oare rganizations who wants to probably come to terms with discrimination of women should make an effort on a local level, rather than depend upon central institutions to do it for them.

Place, publisher, year, edition, pages
Lengerich: Science Publishers, 2008 Edition: 1st
Keyword
pay setting, equal opportunities, fairness, pay criteria, goal setting, performance, pay-for-performance
Identifiers
urn:nbn:se:su:diva-38307 (URN)978-3-89967-479-8 (ISBN)
Available from: 2010-04-08 Created: 2010-04-08 Last updated: 2010-04-08Bibliographically approved

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