The goal of this paper is to develop a conceptual model based on identity theory to specify the relationship between group incentives and pay satisfaction. Pay satisfaction, as currently measured, does not include items that directly measure group-based rewards, therefore, any changes in pay satisfaction associated with group incentive implementation would be the result of some spillover effect. Identity theory is employed to model this effect by delineating how group incentives tap salient work-related roles; the theory also has implications for various behavioral consequences. The research described in this paper tests two hypotheses derived from the conceptual model. These hypotheses are tested in two quasi-experimental field studies conducted in a high technology firm and a consumer products company that both implemented gainsharing programs. The findings indicate that gainsharing plans can be viewed as either a benefit or as part of individual pay based on the ability of the incentive plan to activate salient work-related roles.
ASH, R. A., LEE, Y. L., & DREHER, G. F.Exploring the Determinants of Pay Satisfaction Using Better Mousetraps. Paper presented at the Meeting of the American Psychological Association, Los Angeles, August 1995.
2.
BALKIN, D. B., & GOMEZ-MEJIA, L. R.Faculty Pay Satisfaction Under Union and Nonunion Conditions. Paper presented at the Academy of Management Meetings, Dallas, August 1983.
3.
BERGER, C. J., & SCHWAB, D. P.Pay incentives and pay satisfaction. Industrial Relations, 1980, 19, 206-211.
4.
BERKOWTIZ, L., COHCRAN, S., FRASER, C., & TREASURE, F. P.Pay, equity, job gratifications and comparisons in pay satisfaction. Joumal of Applied Psychology, 1984, 72, 544-551.
5.
BURKE, P. J.Identity processes and social stress. American Sociological Review, 1991, 56, 836-849.
COOK, K S., & HEGTEVDT, K A.Distributive just, equity, and equality. Annual Review of Sociology, 1983, 9, 217-241.
8.
DREHER, G. F.Predicting the salary satisfaction of exempt employees. Personnel Psychology, 1981, 34, 579-589.
9.
DYER, L., & THERIAULT, R.The determinants of pay satisfaction. Journal of Applied Psychology, 1976, 61, 596-604.
10.
FARR, J. L.Incentive schedules, productivity, and satisfaction in work groups: A laboratory study. Organizational Behavior and Human Performance, 1976, 17, 159-170.
11.
FREEDMAN, S. M., & MONTANARI, J. R.An integrative model of managerial reward allocation. Academy of Management Review, 1985, S, 381-390.
12.
GENERAL ACCOUNTING OFFICE. Productivity sharing programs: Can they contribute to productivity improvement?Washington, D.C.: U.S. General Accounting Office, 1981.
13.
GOMEZ-MEJIA, L R., & BALKIN, D. B.Effectiveness of individual and aggregate compensation strategies. Industrial Relations, 1989, 28, 431-445.
14.
GRAHAM-MOORE, B. E., & ROSS, T. L.Gainsharing: Plans for improving perfonnance. Washington, D.C.: BNA, 1990.
15.
GREENBERG, G.Reactions to procedural justice in payment distributions: Do the means justify the ends?Journal of Applied Psychology, 1984, 72, 55-61.
16.
HAMMEN, C., MARKS, T., DEMAYO, R., & MAYOL, A.Self-schemas and risk for depression: A prospective study. Journal of Personality and Social Psychology, 1985, 49, 1147-1159.
17.
HAMMER, T.New developments in profit sharing, gainsharing, and employee ownership. In J. P. Campbell and R. J. Campbell (Eds.), Productivity in organizations: New perspectives from industrial and organizational psychology. San Francisco: Jossey-Bass, 1988, pp. 328-366.
18.
HATCHER, L., & ROSS, T. L.From individual incentives to an organization-wide gainsharing plan: Effects on teamwork and product quality. Journal of Organizational Behavior, 1991, 12, 169-183.
19.
HENEMAN, H. G.Pay satisfaction. Research in Personnel and Human Resources Management, 1985, 3, 115-139.
20.
HENEMAN, H. G., & SCHWAB, D. P.Pay satisfaction: Its multidimensional nature and measurement. Joumal of Psychology, 1985, 20, 129-141.
21.
JENKINS, D. G., & LAWLER, E. E.Impact of employee participation in pay plan development. Organizational Behavior and Human Performance, 1981, 28, 111-128.
22.
KREFTING, L. A., & MAHONEY, T. A.Determining the size of a meaningful pay increase. Industrial Relations, 1977, 16, 83-93.
23.
LAWLER, E. E.Pay and organizational effectiveness. New York: McGraw-Hill, 1971.
24.
LAWLER, E. E.Pay and organizational development. Reading MA: Addison-Wesley, 1981.
25.
LAWLER, E. E.Gainsharing theory and research: Findings and future directions. Research in Organizational Change and Development, 1988, 2, 323-344.
26.
LAWLER, E. E., LEDFORD, G. E., & MOHRMAN, S. A.Employee involvement in America. Houston, TX: American Productivity and Quality Center, 1989.
27.
LAWLER, E. E.Strategic pay: Aligning organizational strategies and pay systems. San Francisco, CA: Jossey-Bass, 1990.
28.
LONG, R. J.Patterns of workplace innovation in Canada. Industrial Relations, 1989, 44, 805-820.
29.
MICELI, M. P., & LANE, M. C.Antecedents of pay satisfaction: A review and extension. Research in Personnel and Human Resources Management, 1991, 9, 235-309.
30.
MILKOVICH, G. T., & WIGDOR, A. KPay for performance. Washington, D.C.: National Academy Press, 1991.
31.
MOTOWIDLO, S. J.Predicting sales turnover from pay satisfaction and expectation. Journal of Applied Psychology, 1983, 68, 484-489.
32.
OST, E. J.Team-based pay: New wave strategy incentives. Sloan Management Review, Spring 1990, 19-27.
33.
PEARLIN, L. I.The sociological study of stress. Joumal of Health and Social Behavior, 1989, 30, 241-256.
34.
SCHRIESHIEM, C. A.Job satisfaction, attitudes towards unions, and voting in a union representation election. Journal of Applied Psychology, 1978, 63, 548-552.
35.
SCHUSTER, M. H.The Scanlon plan: A longitudinal analysis. Journal of Applied Behavioral Science, 1984, 20, 23-28.
36.
SCHWAB, D. P., & WALLACE, M. J.Correlates of employee satisfaction with pay. Industrial Relations, 1974, 13, 78-89.
37.
SHANK, S. E.Preferred hours of work and corresponding earnings. Monthly Labor Review, November 1986, 40-44.
38.
SHAPIRO, H. J., & WAHBA, M. A.Pay satisfaction: An empirical test of a discrepancy model. Management Science, 1978, 24, 612-622.
39.
SIMON, R. W.Parental role strains, salience of parental identity and gender differences in psychological distress. Joumal of Health and Social Behavior, 1992, 33, 25-35.
40.
SMITH, C. A., ORGAN, D. W., & NEAR, J. P.Organizational citizenship behavior: Its nature and antecedents. Joumal of Applied Psychology, 1983, 68, 653-663.
41.
STRYKER, S.Identity theory: Developments and extensions. In K. Yardley and T. Honess (Eds.), Psychosocial perspectives. New York: Wiley, 1987, pp. 89-103.
42.
STRYKER, S., & SERPE, R. T.Commitment, identity, salience, and role behavior. In W. Ickes and E. S. Knowles (Eds.), Personality, roles, and social behavior. New York: Springer-Verlag, 1982, pp. 199-218.
43.
THOITS, P. A.On merging identity theory and stress research. Social Psychology Quarterly, 1991, 54, 101-112.
44.
THOITS, P. A.Identity structures and psychological well-being: Gender and marital status comparisons. Social Psychology Quarterly, 1992, 55, 236-256.
45.
WEINER, N.Determinants and behavioral consequences of pay satisfaction: A comparison of two models. Personnel Psychology, 1980, 33, 741-757.
46.
WELBOURNE, T. M., & GOMEZ-MEJIA, L. R.Team incentives in the workplace. In M. L. Rock and L. A. Berger (Eds.), The compensation handbook (3rd ed.). McGraw-Hill, 1991, pp. 236-247.
47.
WORLEY, C. G., BOWEN, D. E., & LAWLER, E. E.On the relationship between objective increases in pay and employees' subjective reactions. Journal of Organizational Behavior, 1992, 13, 559-571.
