Humanistic Management and Living Wages: a Case of Compelling Connections?

Abstract

The balance between employee pay and human thriving remains theoretically and empirically under-explored at the lower-end of the wage and income spectrum. Poverty Trap theory and the Law of Diminishing Returns offer seemingly contradictory predictions of the relationship between thriving and wages. An exploratory survey of low-and middleincome earners from a range of occupations was used to test these competing possibilities by relating hourly wage rates to thriving as measured by sense of (i) work happiness (job satisfaction, empowerment, and pride), (ii) well-being (mental and physical health, participation in community life, life satisfaction); and (iii) wage fairness (compared to upper management, reciprocity for the job). Linkages between pay and human capabilities (i)-(iii) were statistically significant, and non-linear. Fairness (reciprocity) had the closest association with hourly wages and household income, suggesting a mediating role between pay and (i)-(ii). Increments in hourly pay yielded diminishing returns, whilst increments in household income only yielded clear gains, on feelings of pay justice, once the current campaigned-for living wage figure was breached. Poverty Traps and Diminishing Returns may each play a part in the link between on the one hand decent wages and income, and on the other hand eradication of working poverty.

Escape from Working Poverty: Steps toward Sustainable Livelihood

“…Rupp et al [15] stated that, "Organizational justice has been identified as one of the more dominant and frequently studied topics in industrial-organizational psychology, organizational behavior, and human resource management" (p. 919). Despite this broad support, there is an acknowledgement that the psychology field understands less about those at the bottom of the pay spectrum, for example [2]. Carr et al [16] noted that, "Work may be a panacea for poverty, but the world of work in 2018 is characterized by 'Working Poverty'" (p. 901), reinforcing the point that our understanding of workers in low paying jobs is poor.…”

“…We understand little about the psychology of working poverty [1], including the psychology of transitioning from it toward more sustainable livelihoods [2]. In particular, linkages between "employee pay and human thriving remain theoretically and empirically under-explored at the lower-end of the wage-and-income spectrum" [2] (p. 215). Compounding this gap in our understanding is an under-representation of countries outside of the United States [3].…”

“…Importantly, we seek to understand whether at the lowest levels of pay, are there differences in the way that pay fairness influences job satisfaction for the working poor. Other meta-analyses beyond Judge et al, for example [5], have shown that pay can play an important role in shaping job attitudes and behaviors, although seldom in the context of working poverty [2].…”

“…However, we do not know well whether workers earning barely enough money to survive might hold similar effects from pay under organizational justice theory. Thus, understanding how these perceptions around pay fairness might influence job satisfaction-which is an important component of well-being [2,6], and a prime determinant of job performance [11]-is important to explore.…”

In a Time of Global Upheaval- Humanistic Management Thinking Needed More Than Ever

“…In a fourth original paper, a group of researchers of the poverty research group at Massey University, New Zealand explore humanistic management and its related policy dimensions (Carr et al 2017). Specifically, Stuart Carr, Jane Parker, James Arrowsmith, Jarrod Haar, and Harvey Jones explore the question of a living wage.…”