Is it Just...about Equity? Reactions to Pay Dispersion from a Distributive Justice Framework
Public opinion to rising pay dispersion is mixed. Arguments in support of or in opposition to pay dispersion center around whether it is seen as just (e.g., EPI, 2021). The current research uses a distributive justice framework to examine under what conditions people more strongly oppose pay dispersion and why. In two between-subjects experiments, participants read and evaluated the spread of pay for fictitious organizations. Based on discussions in press media (e.g., Cowen, 2019, April 11), and previous work (Sin et al., 2021), I reasoned that people would rate higher (vs. lower) levels of pay dispersion (Study 1) and high levels of pay dispersion in low (vs. high) performing organizations (Study 2) to be more justice-violating. Consequently, I predicted that those who perceive the pay dispersion to be more justice-violating would oppose it more. Moreover, I predicted that these effects should be stronger for those who prefer outcomes to be distributed justly – based on principles of equity, equality, and need. In both studies, the more participants perceived the spread of pay to be more inequitable, unequal, and need-violating, the more they opposed it. Furthermore in Study 1, participants opposed higher (vs. lower) pay dispersion because they perceived it to more inequitable, too unequal, and need-violating, and more strongly opposed the spread of pay. These effects were stronger among those higher in preference for the merit principle, SDO-egalitarianism, and preference for need orientation. In Study 2, organizational performance did not predict justice perceptions or opposition to pay dispersion. Implications are discussed.