Pay openness movement: is it merited? Does it influence more desirable employee outcomes than pay secrecy?

Summary

The research paper "Pay openness movement: is it merited? Does it influence more desirable employee outcomes than pay secrecy?" by Marasi, Wall, and Bennett (2018) addresses the growing trend toward increased pay openness in workplaces and its implications for employee outcomes. The study aimed to determine if pay openness is merited by analyzing how pay communication practices, specifically pay secrecy versus pay openness, influence workplace deviance and organizational citizenship behaviors (OCBs). The authors hypothesized that pay secrecy practices would lead employees to engage in fewer OCBs and more workplace deviance, with informational and distributive justice perceptions acting as mediators in these relationships. For their methodology, Marasi, Wall, and Bennett developed and validated a new Pay Communication scale. They utilized a cross-sectional, survey-based design, gathering data from a sample of 611 American MTurk workers. Their analytical model tested how pay communication openness was associated with OCBs and counterproductive work behaviors (CWB) through the mediation of enhanced informational and distributive justice perceptions. The findings indicated that pay secrecy generally leads to greater workplace deviance and reduced organizational citizenship behaviors (OCBs). Specifically, the study found that pay openness positively influenced OCBs through enhanced informational justice perceptions. Furthermore, pay openness showed a weaker, indirect negative effect on counterproductive work behaviors (CWB) also via informational justice perceptions. While both informational and distributive justice perceptions were included as hypothesized mediators, the empirical results highlighted informational justice as the key mediator for the observed relationships between pay openness and both OCBs and CWB, with no direct link found through distributive justice for these specific outcomes. The authors concluded that the pay openness movement is indeed merited. The implications of this study are significant for organizational management. The research suggests that organizations should consider moving towards greater pay openness. By doing so, they can potentially mitigate negative employee attitudes and behaviors such as distrust, cynicism, and organizational disidentification, while simultaneously fostering more desirable outcomes like increased organizational citizenship behaviors. Implementing pay openness can help organizations create a workplace where employees perceive greater fairness and are more likely to engage in positive, extra-role behaviors beneficial to the organization. This shift can contribute to improved overall employee performance and organizational functioning.