Pay Referents and Satisfaction with Pay: Does Occupational Proximity Matter?

15 Pages Posted: 5 May 2020

See all articles by Yannis Georgellis

Yannis Georgellis

University of Kent

Stephen M. Garcia

University of Michigan

Andros Gregoriou

University of Brighton

Mustafa Ozbilgin

Brunel University London

Date Written: July 2019

Abstract

We explore whether employees compare their pay to the pay of others in a similarly prestigious occupation and, if so, whether this comparison has a negative impact on pay satisfaction. Using an experimental vignette methodology, Study 1 found that people are more inclined to compare with others from a similar or identical occupation and that comparison negatively impacts pay satisfaction. This comparison and its negative effect is particularly strong in high‐prestige occupations. Based on survey data, Study 2 also showed that the average pay of others in occupations of similar prestige is negatively correlated with employees’ pay satisfaction. This negative correlation was also stronger in higher‐prestige occupations. Our analysis highlights the importance of occupational prestige as a main factor influencing pay comparison.

Suggested Citation

Georgellis, Yannis and Garcia, Stephen M. and Gregoriou, Andros and Ozbilgin, Mustafa, Pay Referents and Satisfaction with Pay: Does Occupational Proximity Matter? (July 2019). British Journal of Management, Vol. 30, Issue 3, pp. 578-592, 2019, Available at SSRN: https://ssrn.com/abstract=3590601 or http://dx.doi.org/10.1111/1467-8551.12272

Yannis Georgellis (Contact Author)

University of Kent ( email )

Canterbury, Kent CT2 7PE
United Kingdom

Stephen M. Garcia

University of Michigan ( email )

741 Dennison Hall
Ann Arbor, MI 48109
United States
734-615-2561 (Phone)

HOME PAGE: http://www.sitemaker.umich.edu/stephen.garcia

Andros Gregoriou

University of Brighton ( email )

Brighton
Brighton, BN2 4AT
United Kingdom

Mustafa Ozbilgin

Brunel University London ( email )

Kingston Lane
Eastern Gateway Building
Uxbridge, Middlesex UB8 3PH
United Kingdom

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