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Conclusion

  • Debate has continued regarding the relative merits of pay equality and pay equity (Adams, 1965; Beyer, 2017; Beyer, Hensersky, & Thomas, 2018; Trevor, Reilly, & Gerhart, 2012).
  • Given the increased advocacy in support of pay equality, the question was “Does pay equity still matter?”
  • Results showed, unequivocally, that employee perceptions of pay equity mattered in terms of determining important employee-valued outcomes, such as Interpersonal Justice and Pay Satisfaction.
  • Pay equity was an impetus for important employer-valued outcomes, such as Work Engagement, Intention to Stay, Task Performance, and OCBs.
  • Consistent with Adams (1965), perceived pay equity is probably a curious combination of both pay equity and pay inequality.
  • Despite growing emphasis on pay equality, pay equity remains eminently germane and, in fact, pay equity mattered decidedly.

Perceived Pay Equity Predicts Important Employer-Valued Outcomes

Richard Beyer and Adrian Thomas

Abstract and Introduction

Results

 

Discussion

Indirect Effects

  • Interpersonal Justice – H1b, H2b, and H3b posited Perceived Pay Equity would have an indirect effect on important outcome variables via the individual mediating mechanism of Interpersonal Justice.

Results indicated Interpersonal Justice mediated the relationship between Perceived Pay Equity and Intention to Stay, between Perceived Equity and Task Performance, and between Perceived Pay Equity and OCBs.

  • Pay Satisfaction – H1c, H2c, and H3c presupposed Perceived Pay Equity would have an indirect effect on important outcome variables via the mediating mechanism of Pay Satisfaction.

Results indicated Pay Satisfaction mediated the relationship between Perceived Pay Equity and Intention to Stay, between Perceived Pay Equity and Task Performance, and between Perceived Pay Equity and OCBs.

  • Work Engagement – H1d, H2d, and H3d theorized Perceived Pay Equity would have an indirect effect on important outcome variables via the mediating mechanism of Work Engagement.

Results indicated Work Engagement mediated the relationship between Perceived Pay Equity and Intention to Stay, between Perceived Pay Equity and Task Performance, and between Perceived Pay Equity and OCBs.

  • Direct Effects – Only the direct effect of Perceived Pay Equity on task performance was significant (p = .03). Lack of significant direct effects was foreseeable in a model evaluating mediated relationships.
  • The research question underlying all 12 hypotheses across Interpersonal Justice was, “Does Perceived Pay Equity still matter?”
  • Ten times the answer to the proposed research question was, “Yes.”
  • Perceived Pay Equity was a crucial precursor to Intention to Stay, Task Performance, and OCBs.

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Methods

Abstract

Given recent focalized attention to and societal trend emphasizing pay equality we examined the potential continued relevance of pay equity. For a representative sample of American workers (N=999), pay equity was found to have significant direct as well as indirect effects on Intention to Stay, Task Performance, and OCBs.

Introduction

There is a long and controversial history regarding the relative merits of pay equality and pay equity. Proponents of equal pay argue that differences in pay, especially for the same or similar jobs, may indicate unfair discrimination. Backers of equitable pay argue that pay differences should be based heavily, if no

t completely, on productivity-relevant inputs (Adams, 1965; Trevor, Reilly, & Gerhart, 2012). Based on such arguments, it is not uncommon for people to fall susceptible to an “all equality” or “all equity” mindset. News and social media disclose stories of open hostility between advocates of strict pay equality and backers of strict pay equity (Kelly & Harlow, 2017). One example concerns the relatively heated debate regarding equal pay for the U. S. Women’s Soccer Team versus the U.S. Men’s Team, with comparably ardent arguments occurring among other soccer federations around the world (Patrick, 2019). Given recent elevated emphasis on and advocacy for pay equality in both the popular press and academic journals, the research question in the current study was, “Does pay equity still matter for employees and employers?”