Multiple salary comparisons, distributive justice, and employee withdrawal.

Abstract

Salary comparison has well-established implications for employees' attitudes and behaviors at work. Yet how employees process information about simultaneous comparisons, particularly when internal and external comparison information is incongruent, remains controversial. In this article, we draw from the model of dispositional attribution and equity theory to predict how the incongruence of internal and external salary comparisons affects perceptions of distributive justice and subsequent employee withdrawal behavior. We hypothesized that the effect of salary comparisons on perceived distributive justice follows a hierarchically restrictive schema in which a lower salary in comparison to a referent has a greater effect than a higher salary. This further affects employee withdrawal (neglect, turnover intention, and voluntary turnover). We also propose that the effects of salary comparisons are bounded by employees' zero-sum construal of success. Three studies were conducted to test our hypotheses: a quasi-experimental study and two time-lagged field studies. Consistent with our hypotheses, we observed that, when comparison information was incongruent, underpayment compared with others more strongly affected perceived distributive justice than overpayment did. The subsequent impact on perceived distributive justice was negatively related to employee withdrawal. As expected, the effect of incongruent salary comparison information was stronger for employees with lower zero-sum construal of success. The theoretical and practical implications of these findings are discussed.