IDEAS home Printed from https://ideas.repec.org/a/vrs/manmar/v11y2016i2p431-448n2.html
   My bibliography  Save this article

Motivational effects of pay dispersion in pay for performance programs implemented in Romanian companies

Author

Listed:
  • Urieşi Sebastian

    (Alexandru I. Cuza University, Iaşi, Romania)

Abstract

The present study investigates the motivational effects in a sample of Romanian employees in private companies that implement pay for performance programs of one of the characteristics of these programs, namely pay dispersion, and on the potential mediating role of organizational justice in these effects. To this aim, we examined the relationships between the amounts of pay dispersion introduced by the respective financial incentive system, employee perceptions of distributive and procedural justice, work motivation, and base salary, respectively. The results of the data analysis, performed through structural equation modeling, support our hypotheses concerning the positive effect of performance – related pay dispersion on motivation and the mediating role of the two dimensions of organizational justice in this effect. Larger financial rewards allocated by the financial incentive system for high performers increase employee perceptions of distributive and procedural justice, which, in turn, foster work motivation. Base salary was also found to influence pay dispersion, as well as perceived distributive justice.

Suggested Citation

  • Urieşi Sebastian, 2016. "Motivational effects of pay dispersion in pay for performance programs implemented in Romanian companies," Management & Marketing, Sciendo, vol. 11(2), pages 431-448, July.
    • Handle: RePEc:vrs:manmar:v:11:y:2016:i:2:p:431-448:n:2
    DOI: 10.1515/cks-2016-0007
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/cks-2016-0007
    Download Restriction: no
    File URL: https://libkey.io/10.1515/cks-2016-0007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. DeConinck, James B. & Stilwell, C. Dean, 2004. "Incorporating organizational justice, role states, pay satisfaction and supervisor satisfaction in a model of turnover intentions," Journal of Business Research, Elsevier, vol. 57(3), pages 225-231, March.
    2. Woessmann, Ludger, 2011. "Cross-country evidence on teacher performance pay," Economics of Education Review, Elsevier, vol. 30(3), pages 404-418, June.
    3. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 791-810.
    4. David Marsden & Ray Richardson, 1994. "Performing for Pay? The Effects of ‘Merit Pay’ on Motivation in a Public Service," British Journal of Industrial Relations, London School of Economics, vol. 32(2), pages 243-261, June.
    5. Brashear, Thomas G. & Brooks, Charles M. & Boles, James S., 2004. "Distributive and procedural justice in a sales force context: Scale development and validation," Journal of Business Research, Elsevier, vol. 57(1), pages 86-93, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lacetera, Nicola & Macis, Mario, 2008. "Motivating Altruism: A Field Study," IZA Discussion Papers 3770, Institute of Labor Economics (IZA).
    2. Rana Muhammad Shahid Yaqub & Aneeta Rehman & Shakeela Kausar & Zakariya Hassan Qureshi, 2022. "Insights from Theory of Reason Action to Determine the Faculty Turn-Over Intentions in HEI’s of Southern Punjab: Mediating and Moderating Role of Perceived Organizational Justice and Organizational ," iRASD Journal of Management, International Research Alliance for Sustainable Development (iRASD), vol. 4(2), pages 375-389, june.
    3. Alpízar, Francisco & Martinsson, Peter, 2010. "Don’t Tell Me What to Do, Tell Me Who to Follow! - Field Experiment Evidence on Voluntary Donations," Working Papers in Economics 452, University of Gothenburg, Department of Economics.
    4. Linardi, Sera & McConnell, Margaret A., 2011. "No excuses for good behavior: Volunteering and the social environment," Journal of Public Economics, Elsevier, vol. 95(5), pages 445-454.
    5. Dan Ariely & Kristina Shampan'er, 2006. "How small is zero price? : the true value of free products," Working Papers 06-16, Federal Reserve Bank of Boston.
    6. Beatty, Timothy K.M. & Katare, Bhagyashree, 2018. "Low-cost approaches to increasing gym attendance," Journal of Health Economics, Elsevier, vol. 61(C), pages 63-76.
    7. Dickinson, David & Villeval, Marie-Claire, 2008. "Does monitoring decrease work effort?: The complementarity between agency and crowding-out theories," Games and Economic Behavior, Elsevier, vol. 63(1), pages 56-76, May.
    8. Calabuig, Vicente & Fatas, Enrique & Olcina, Gonzalo & Rodriguez-Lara, Ismael, 2016. "Carry a big stick, or no stick at all," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 153-171.
    9. Christine Exley, 2013. "Incentives for Prosocial Behavior: The Role of Reputations," Discussion Papers 12-022, Stanford Institute for Economic Policy Research.
    10. Elliott Ash & W. Bentley MacLeod, 2015. "Intrinsic Motivation in Public Service: Theory and Evidence from State Supreme Courts," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    11. Mzoughi, Naoufel, 2011. "Farmers adoption of integrated crop protection and organic farming: Do moral and social concerns matter?," Ecological Economics, Elsevier, vol. 70(8), pages 1536-1545, June.
    12. Bruno S. Frey & Alois Stutzer, 2006. "Environmental Morale and Motivation," CREMA Working Paper Series 2006-17, Center for Research in Economics, Management and the Arts (CREMA).
    13. Uri Gneezy & Aldo Rustichini, 2004. "Gender and Competition at a Young Age," American Economic Review, American Economic Association, vol. 94(2), pages 377-381, May.
    14. David Marsden, 2009. "The Paradox of Performance Related Pay Systems: 'Why Do We Keep Adopting Them in the Face of Evidence that they Fail to Motivate?'," CEP Discussion Papers dp0946, Centre for Economic Performance, LSE.
    15. Victor Iajya & Nicola Lacetera & Mario Macis & Robert Slonim, 2012. "The Effects of Information, Social and Economic Incentives on Voluntary Undirected Blood Donations: Evidence from a Randomized Controlled Trial in Argentina," NBER Working Papers 18630, National Bureau of Economic Research, Inc.
    16. Jie, Yun, 2020. "Responding to requests for help: Effects of payoff schemes with small monetary units," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 88(C).
    17. Andrei Bremzen & Elena Khokhlova & Anton Suvorov & Jeroen van de Ven, 2015. "Bad News: An Experimental Study on the Informational Effects Of Rewards," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 55-70, March.
    18. Eyal Winter, 2009. "Incentive Reversal," American Economic Journal: Microeconomics, American Economic Association, vol. 1(2), pages 133-147, August.
    19. Arno Riedl & Paul Smeets, 2017. "Why Do Investors Hold Socially Responsible Mutual Funds?," Journal of Finance, American Finance Association, vol. 72(6), pages 2505-2550, December.
    20. Yildiz, H. Emre, 2016. "“Us vs. them” or “us over them”? On the roles of similarity and status in M&As," International Business Review, Elsevier, vol. 25(1), pages 51-65.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:manmar:v:11:y:2016:i:2:p:431-448:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.