Determinants of perceived pay inequities: The effects of comparison other characteristics and pay-system communication

Using an equity theory framework, we hypothesized that performance, seniority, and gender differences in comparison others lead to perceived pay inequities, but that this relationship is moderated by an explanation of the pay system. A policy-capturing methodology was used. We found that performance and seniority differences are related to perceived pay inequities, but these perceived inequities were less pronounced when the pay system was explained to employees. Interestingly, we did not find any evidence of gender effects in perceived pay inequities. These results are discussed in terms of new developments in integrating procedural-justice and distributive-justice domains.