Articlegreen1996

Why justice matters in compensation decision making

79 citations0/0 files storedJournal of Organizational Behavior

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Job Satisfaction and Organizational Behavior Public Policy and Administration Research Human Resource and Talent Management

Abstract

Using agency theory and the stakeholder fairness concept as the conceptual base, this study confirmed three agency theory hypotheses about differential relationships between four sets of pay procedures and evaluations of pay, supervision and the employing organization. Education and seniority related variables were also found to moderate the relationships between procedural justice perceptions and evaluations of supervision and the employing organization. The study used a stratified random sample of 612 occupationally heterogeneous employees of a large County government in South Eastern United States. Results suggest that agency theory provides a parsimonious explanation for why justice matters in compensation decision making.

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References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1986Self-Reports in Organizational Research: Problems and Prospects 1965Inequity In Social Exchange 1996Production, Information Costs and Economic Organization 1979The measurement of organizational commitment 1933The Modern Corporation and Private Property 1988The Social Psychology of Procedural Justice 1973The Economic Theory of Agency: The Principal's Problem.

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2003Employee ownership and affective organizational commitment: employees’ perceptions of fairness and their preference for company shares over cash 2003The dimensionality and determinants of pay satisfaction: a cross-cultural investigation of a group incentive plan 2008Procedural justice criteria in salary determination 1998A Study of the Determinants and of the Impact of Flexibility on Employee Benefit Satisfaction 2008Are pay satisfaction and pay fairness the same construct?2001

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