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¶ … Workplace
Landy and Conte (2013) note the fairness is understood as a component of exchange between two or more parties. The fairness reflects some form of equity, but the authors note that there are a few different perspectives against which fairness can be evaluated. The first of these is distributive fairness. This concept reflects a fairness of outcomes. This principle can come in a pure form, like in Cuba where everybody earns the same wage, but more often it comes with some sort of caveat, like "equal pay for equal work." There are different norms to describe distributive justice. These can be merit (the equal pay for equal work) norm and the need norm (to each according to his need). Landy and Conte also note that culture plays a role in how justice is perceived. The norm of a country will be different based on the collectivist-individualist paradigm. Because equity is subjective, power distance will also play a role. So an individualist society like the U.S. with a low power distance is in general accepting of vast wealth disparities...
In a collectivist society, disparities are likely frowned upon, but power distance moderates that because it is expected that people are of different classes. Countries with high power distance accept that the boss gets paid a lot, though this is usually in conjunction with the boss having social obligation towards the workers.
It is difficult to impose distributive justice, and in many American companies it is not something the culture demands. However, merit justice is relatively easy to implement where there are quantitative performance measures -- employees who perform at the same level get paid the same. Indeed, this is a fundamental principle of many of the employment laws that derive from the Civil Rights Act of 1964, so a merit system almost has to be in place for wages, benefits and promotions.
The second type of justice is procedural justice. This is in theory how the legal system works, and how it would work if money was not a barrier…
References
Folger, R. & Konovsky, M. (1989). Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal. Vol. 32 (1) 115-130.
Landy, F. & Conte, J. (2013). Work in the 21st century: An introduction to industrial and organizational psychology. John Wiley & Sons.
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