The Mythology of Management Compensation

This is not to imply that the leading figures in the “human relations” movement do not understand the importance of pay. But, by emphasizing other rewards and by not dealing explicitly with the role of pay, they have opened the door for others to interpret their writings as implying that pay is unimportant.

It should be pointed out that neither Maslow nor any of the leading figures in the “human relations” movement has stated that pay satisfies only lower-order needs. Others make the interpretation that it satisfies only lower-order needs (e.g., McKersie Robert B. , “Wage Payment Methods of the Future,” British Journal of Industrial Relations, I [March 1963], 191–212).

Lawler Edward E. Porter Lyman W. , “Perceptions Regarding Management Compensation,” Industrial Relations, III (Oct. 1963), 41–49; and Myers M. Scott , “Who Are Your Motivated Workers?” Harvard Business Review, XLII (Jan.-Feb., 1964), 72–88.

Patton Arch , Men, Money, and Motivation (New York: McGraw-Hill Book Co., Inc., 1961), p. 34.

Porter Lyman W. , “A Study of Perceived Need Satisfaction in Bottom and Middle Management Jobs,” Journal of Applied Psychology, XLV (Feb. 1961), 1–10.

Brown Wilfred , Piecework Abandoned (London: Heineman and Co. Ltd., 1962), p. 15.

There is evidence that the law of effect can work where a clearly perceived relationship between the behavior and the reward does not exist. However, the important point is that rewards are maximally effective when they are seen as being clearly tied to the behavior that they are intended to reward. (See, e.g., McGeoch John A. Irion Arthur L. , The Psychology of Human Learning [New York: Longmans, Green and Co., 1952].)

Mahoney Thomas A. , “Compensation Preferences of Managers,” Industrial Relations, III (May 1964), 135–144.

Herzberg Frederick Mausner Bernard Snyderman Barbara Bloch , The Motivation to Work (New York: John Wiley and Sons, 1959).

Adams J. Stacy , “Wage Inequities, Productivity and Work Quality,” Industrial Relations, III (Oct. 1963), 9–16.

Lawler Edward E. Porter Lyman W. , op. cit.

The presidents in this sample tended to come from smaller companies and, hence, the relatively low-level of their compensation.

Further support for this interpretation comes from the finding that there was a significant tendency for those managers who had an accurate picture of their subordinates' pay to be more satisfied with their own pay than were those managers who had an inaccurate picture of their subordinates' pay (r = .35, p = .01).

Vroom Victor H. , Work and Motivation (New York: John Wiley and Sons, 1964).

Nealey Stanley M. , “Pay and Benefit Preference,” Industrial Relations, III (Oct. 1963), 17–28; Mahoney Thomas A. , op. cit.; and. Andrews I. R. Henry Mildred M. , “Management Attitudes Toward Pay,” Industrial Relations, III (Oct. 1963), 29–39.

Dunnette Marvin D. Bass Bernard M. , “Behavioral Scientists and Personnel Management,” Industrial Relations, III (May 1963), 115–130.