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Firms' Wage Structures, Workers' Fairness Perceptions, Job Satisfaction and Turnover Intentions: Evidence from Linked Employer-Employee Data

Author

Listed:
  • Mohrenweiser, Jens

    (Bournemouth University)

  • Pfeifer, Christian

    (Leuphana University Lüneburg)

Abstract

The paper uses novel data for Germany linking worker and establishment surveys with administrative social security data for all workers in the surveyed establishments. From these data, four variables are generated that describe a firm's wage structure and the positions of workers within it: (a) workers' own absolute wages, (b) workers' conditional internal reference wages within firms, (c) the conditional wage dispersion in firms, and (d) workers' conditional external reference wages across firms. Three empirical contributions are made: (1) the impact of firms' wage structures on workers' perceived wage fairness as an important organizational justice variable, (2) the impact of firms' wage structures on workers' job satisfaction and turnover intentions, and (3) the contribution of the fairness considerations on the overall effects of the wage structure variables on workers' job satisfaction and turnover intentions. The findings suggest that equity and social status considerations as well as altruistic preferences towards co-workers and inequality aversion are important, whereas the evidence for signal considerations is limited.

Suggested Citation

  • Mohrenweiser, Jens & Pfeifer, Christian, 2019. "Firms' Wage Structures, Workers' Fairness Perceptions, Job Satisfaction and Turnover Intentions: Evidence from Linked Employer-Employee Data," IZA Discussion Papers 12821, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12821
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    References listed on IDEAS

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    1. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).

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    More about this item

    Keywords

    income comparison; inequality; fairness; job satisfaction; turnover;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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