Pay Equity as a Mediator of the Relationships Among Attitudes and Communication About Pay Level Determination and Pay Secrecy

Abstract

Although a limited amount of research exists on pay communication, most shows that pay communication is associated with positive attitudes. Little research exists on pay secrecy and its outcomes. Using equity theory, this article explores the dynamics of how perceived pay communication and perceived pay secrecy policies relate to desirable attitudes. The article proposes that pay equity is the link that mediates these relationships. Data were collected in a U.S. public utility, and findings reveal that perceived communication about how pay levels are determined is positively associated with affective organizational commitment and three dimensions of pay satisfaction, and most of these relationships are fully or partially mediated by pay equity. While perceived written pay secrecy policies show no relationship with attitudes, perceived unwritten secrecy policies negatively predict pay administration satisfaction and this relationship is mediated by pay equity. Finally, neither written nor unwritten pay secrecy policies are related to whether or not respondents report discussing their pay.

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