Employee Rights: The Equity-Equality Conflict as a Dilemma in the Management of Reward Systems

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Abstract

This article investigates the factors that determine workplace actors’ appeal to social norms of fairness in some situations and what ‘fairness’ is perceived as consisting of. When is a pay level considered as relativity fair, and when is it not? When are contingent pay systems (i.e. pay-for-performance systems) perceived as fair and when are they not? When can differences in contribution (equity) overrule the social norm of equality? Which contingent reward structure should be applied for teamwork members, if any? Which reward structure should be utilized to motivate employees to a continuous search for smarter working procedures and solutions? These are central concerns of motivation theory, where rational choice decisions are counterbalanced by endowment effects or other fairness concerns. Management is placed in a dilemma between what is, e.g., an economically rational structure of incentives, on the one hand, and what is considered as equitable (in accordance with employment rights) by employees, on the other. Since equality in reward counts for more among a considerable fraction of employees, while equity in contribution counts more for most employers, this is an inherent dilemma, constantly having to be negotiated and solved, but never reaching any ‘final solution’ in any company. On the basis of this dilemma, implications for management are spelt out, and recommendations for the utilization of and limitations for pay variance among peers are given.
Original languageEnglish
Title of host publicationDevelopment and the Politics of Human Rights
EditorsScott Nicholas Romaniuk, Marguerite Marlin
Place of PublicationBoca Raton, FL, USA
PublisherCRC Press
Publication date2016
Pages155-165
Article number14
ISBN (Print)9781498707060
Publication statusPublished - 2016
SeriesPublic Administration and Public Policy
Number198

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