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Abstract

While publications on compensation practices and methods are abundant, relatively little is known about preferences of the working population in regard to factors that can be used as compensation justification criteria. A heterogeneous sample consisting of 354 individuals residing in a urban community in the US was asked to rate the following factors as criteria of compensation on 7-point scales: productivity, effort, cost of living, level of education, seniority, age, sex, ethnic background, workers'financial need, and workers'family size. For the sample as a whole, high level of support (scores over 5.0) was found for productivity, effort and cost of living as criteria of compensation; moderate support (scores of 4.0 to 4.9) wasfoundfor education and seniority; low level of support (scores of 1.0 to 2.9) was found for age, worker's financial need and family size, ethnic background, and sex. However, tests of significance showed that ratings of compensation criteria were significantly influenced by worker demographic characteristics and work values as measured by questions from work values inventories. Implications of these findings are traced for compensation administration and current social concerns relating to the work ethic.

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Compensation Justification Criteria: An Expanded Perspective

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