Adaptation and Context
Research Handbooks in Business and Management series
Edited by Anders Örtenblad
Chapter 5: Panacea or Pandora’s box? The role of fairness perceptions and interpersonal competitiveness in determining how pay secrecy affects individual task performance
Research consistently indicates that pay secrecy has a detrimental impact on individual task performance. However, the mechanisms underlying this effect remain poorly understood. In the current study we examine distributive fairness as a potential mediator, and interpersonal competitiveness as a potential moderator of this relationship. Using a simulation-based, experimental design and a sample of 53 students, we find that close to a fifth of this negative effect of pay secrecy on individual task performance may be explained in terms of how pay communication influences individuals’ distributive fairness perceptions. Additionally, we find that the indirect effects of pay communication on task performance are amplified as a function of interpersonal competitiveness, with the adverse effects of secrecy on distributive fairness perceptions being intensified among more interpersonally competitive individuals. Implications for both research and practice are discussed.
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