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On the Relationship between Objective Increases in Pay and Employees' Subjective Reactions

Christopher G. Worley, David E. Bowen and Edward E. Lawler III
Journal of Organizational Behavior
Vol. 13, No. 6 (Nov., 1992), pp. 559-571
Published by: Wiley
Stable URL: http://www.jstor.org/stable/2488342
Page Count: 13
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On the Relationship between Objective Increases in Pay and Employees' Subjective Reactions
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Abstract

This study explored whether two principles describe the relationship between the size of a pay increase (a bonus expressed as a percentage of current salary) and the attractiveness of that increase. Based on a sample of sales personnel (N=639) and consistent with the constant proportion principle of the psychophysical law, pay increase attractiveness was unrelated to current salary level after controlling for the size of the percentage increase. In addition, at any given salary level, the relationship between the size of the increase and its attractiveness was curvilinear. The attractiveness of larger and larger bonus percentages continues to increase, but at a decreasing rate supporting the principle of diminishing returns.

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