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Product Quality and Pay Equity Between Lower-Level Employees and Top Management: An Investigation of Distributive Justice Theory
Douglas M. Cowherd and David I. Levine
Administrative Science Quarterly
Vol. 37, No. 2, Special Issue: Process and Outcome: Perspectives on the Distribution of Rewards in Organizations (Jun., 1992), pp. 302-320
Published by: Sage Publications, Inc. on behalf of the Johnson Graduate School of Management, Cornell University
Stable URL: http://www.jstor.org/stable/2393226
Page Count: 19
You can always find the topics here!Topics: Distributive justice, Quality management, Wage differential, Product management, Financial management, Wages, Employees, Coefficients, Employee motivation, Organizational behavior
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The relationship between interclass pay equity and product quality is examined in a sample of 102 corporate business units. A small pay differential between lower-level employees and upper-echelon managers (after controlling for inputs) is theorized to lead to high product quality by increasing lower-level employees' commitment to top-management goals, effort, and cooperation. Interclass pay equity is determined by comparing the pay and inputs of hourly workers and of lower-level managers and professionals to those of the top three levels of managers. Consistent with the predictions of distributive justice theory, both measures of pay equity are positively related to business-unit product quality.
Administrative Science Quarterly © 1992 Johnson Graduate School of Management, Cornell University