Equity Perception in Multiple Comparisons: A Field Study

Abstract

Data from a survey of all 721 employees in a light manufacturing firm (553 workers and 168 managers) were used to investigate the role of reference groups inside and outside the organization within the framework of equity theory. Attitude toward pay was used as the basis for comparison. The results indicated that the outside reference group is more important than the inside reference group in explaining job attitudes and behavioral propensities. The results also indicated that the contributions of outside and inside pay components are similar for both managers and workers in evaluating pay satisfaction. The relationship between pay components was different for the two groups on overall job satisfaction, however, and may, in fact, be nonlinear for managers.