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Wage structures, fairness perceptions, and turnover intention

16 May 2019 at 11:30 AM - 1:00 PM

Room 205b, Campus on Viale Romania, 32

Speaker: Jens Mohrenweiser , Bournemouth University, UK

Firms’ wage structures, workers’ fairness perceptions, job satisfaction and turnover intentions: Evidence from linked employer-employee data

Authors: Jens Mohrenweiser and Christian Pfeifer 

Abstract 

The paper uses novel data for Germany linking worker and establishment surveys with administrative social security data for all workers in the surveyed establishments. From these data, five variables are generated that describe a firm’s wage structure and the positions of workers within it: (a) workers’ own absolute wages, (b) workers’ conditional internal reference wages within firms, (c) workers’ conditional ordinal wage ranks within firms, (d) the conditional wage dispersion in firms, and (e) workers’ conditional external reference wages across firms. Three empirical contributions are made: (1) the impact of firms’ wage structures on workers’ perceived wage fairness as an important organizational justice variable, (2) the impact of firms’ wage structures on workers’ job satisfaction and turnover intentions, and (3) the contribution of the fairness considerations on the overall effects of the wage structure variables on workers’ job satisfaction and turnover intentions. The findings suggest that equity and social status considerations as well as altruistic preferences towards co-workers and inequality aversion are important, whereas the evidence for signal considerations is limited.