GROUP INCENTIVES AND PAY SATISFACTION - UNDERSTANDING THE RELATIONSHIP THROUGH AN IDENTITY THEORY PERSPECTIVE

The goal of this paper is to develop a conceptual model based on ident ity theory to specify the relationship between group incentives and pa y satisfaction. Pay satisfaction, as currently measured, does not incl ude items that directly measure group-based rewards, therefore, any ch anges in pay satisfaction associated with group incentive implementati on would be the result of some spillover effect. Identity theory is em ployed to model this effect by delineating how group incentives tap sa lient work-related roles; the theory also has implications for various behavioral consequences. The research described in this paper tests t wo hypotheses derived from the conceptual model. These hypotheses are tested in two quasi-experimental field studies conducted in a high tec hnology firm and a consumer products company that both implemented gai nsharing programs. The findings indicate that gainsharing plans can be viewed as either a benefit or as part of individual pay based on the ability of the incentive plan to activate salient work-related roles.