Employee perceptions of the fairness of work group incentive pay plans

A field study investigated 368 employees' perceptions of the fairness of wo rk group incentive pay plans. In particular, we studied the relationships b etween six antecedent variables (understanding of the pay plan, satisfactio n with base pay, organizational commitment, beliefs in the pay plan effecti veness, plan payout amount, and group identification) and outcome variables , including fairness judgments of both the processes associated with the pa y plan as well as the earned payout amounts. The setting for this study was a major nonunion production facility of a Fortune 500 company that is invo lved in chemical production. The findings indicate that understanding of th e pay plan, belief in the pay plan effectiveness, and organizational commit ment were related to perceptions of procedural justice. Moreover, pay satis faction, understanding, belief in the pay plan effectiveness, and organizat ional commitment were associated with perceptions of distributive justice. Further, we found significant effects of two control variables-job classifi cation-on perceptions of procedural justice, and organizational tenure-on b oth perceptions of procedural and distributive justice.