This article analyses the role of collective agreements in institutionalising and legitimising the undervaluation of work conducted by women. The undervaluation of women's work has been identified as one of the main causes of the gender pay gap. Despite this, it continues to escape many of the policy measures on gender pay equity that focus on establishing wage discrimination. The Finnish local government sector provides an interesting case for research on undervaluation, as it has several collective agreements and several wage determination systems for different employee groups. However, a local authority is a single employer, and is obliged by law to treat all employees equally. Although the processes of wage determination vary across different national contexts, institutionalised undervaluation is very likely among highly feminised jobs and occupations worldwide. This article sees wages as social practices that reflect and are shaped by institutional, societal and historical contexts.

Purpose This paper aims to examine the moderating effect of employees’ work orientation and gender on their feelings toward pay, that is, the relationship between perceived fairness of a pay system and pay level satisfaction. The perceived fairness of pay system is investigated with two pay system procedures, namely, job evaluation and performance evaluation, both determining the level of base pay. Design/methodology/approach Survey data were collected from three public sector organizations in Finland (N = 526). Linear regression analysis was used to investigate the relationship between pay satisfaction, pay system fairness, work orientation and gender. Findings The results show that employees’ work orientation significantly and negatively relates to pay satisfaction. The interaction analyses suggest significant gender differences in the relationship between work orientation and pay satisfaction, as work orientation is negatively associated with pay satisfaction for women. They also show that work orientation and job evaluation fairness have a positive, joint effect on pay satisfaction. Practical implications This study has implications for the implementation of fair pay practices in organizations. The role of work orientation in the relationship between job evaluation fairness and pay satisfaction highlights the importance of pay system fairness especially among work-oriented employees. Special attention should be paid on work-oriented women: With equal perception of pay system fairness, work-oriented women feel unsatisfied with their pay. Originality/value This paper is the first study to highlight the role of work orientation and gender in reactions related to pay.