How Employees Will Respond to Pay Inequity

How Employees Will Respond to Pay Inequity

When faced with perceived pay inequity or imbalance, employees will act to restore equity. In evaluating the fairness of their pay, employees will balance inputs (for example work effort, skills) against outcomes (for example pay, privileges).

Workers may experience guilt or anger if they feel over or undercompensated. The greater the perceived disparity, the greater the tension.

Employees may seek balance in the following 6 ways:

  • Modify input oroutput. For example, if underpaid, a person may reduce his effort or try to obtain a raise; if overpaid, a person may increase efforts or work longer hours without additional compensation.
  • Adjust the notion of what is fair. For example if underpaid, a worker may think himself the recipient of other benefits such as doing interesting work; if overpaid, an employee may come to believe that he deserves it.
  • Change source of equity comparison. For example, an employee who has compared himself with a promoted co-worker may begin to compare himself with another worker.
  • Attempt to change the input or output of others. For example, asking others not to work so hard or to work harder.
  • For example: through absenteeism, mental withdrawal or quitting.
  • Force others to with draw. For example, trying to obtain a transfer for a co-worker or force him to quit.

Source: Internal Wage Structure Written By Gregorio Billikopf, University of California