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How experiences and perceptions of pay and pay setting relate to employees’ job performance, willingness to remain in the organization, and health has been the subject of much debate. Previous research has typically used a variable-centered approach to investigate associations between different pay-related factors and such outcomes. In contrast, we used latent profile analysis to explore combinations of compensation characteristics (pay level, perceived horizontal pay dispersion, and procedural quality, i.e., transactional leadership and procedural pay-setting justice), combining relevant theories on the subject. Based on a nationally representative sample of private sector employees in Sweden (N = 1,146), our study identified six compensation profiles. Our key findings show, first, that higher levels of pay were generally associated with better performance, lower turnover intention, better self-rated health, and lower work-related exhaustion, especially when combined with perceptions of high procedural quality. Second, in terms of perceived horizontal pay dispersion, the results indicate that pay compression may be associated with beneficial outcomes, particularly when combined with high procedural quality. Third, procedural quality was generally associated with favorable work-related and health-related outcomes, although such positive effects may be contingent upon pay level and perceived horizontal pay dispersion. In conclusion, while pay level, perceptions of horizontal pay dispersion, and procedural quality may all matter for employee outcomes, it is important to consider their combinations. [ABSTRACT FROM AUTHOR]

Building on the Ability-Motivation-Opportunity framework, we investigate managers' ability, motivation, and opportunity as predictors of managers' self-reported justice enactment during pay setting. Data from 168 managers from a large industrial company in Sweden were analyzed with hierarchical multiple regression analyses to predict the four dimensions of enacted justice (distributive, procedural, informational, interpersonal). Ability indicators contributed to all justice enactment dimensions, with self-efficacy in one's role as pay-setting manager being positively related to all justice enactment dimensions. Motivation indicators contributed to three justice enactment dimensions (not informational), with managers' outcome expectations of pay setting being positively related to distributive justice enactment. Opportunity indicators contributed to three justice enactment dimensions (not interpersonal), where social support in the pay-setting process predicted these justice enactment dimensions. Demographics and personality variables only explained additional variance in interpersonal justice enactment. The paper sheds light on the managers' side of justice in pay setting, and highlights the relevance of resources to equip managers with ability, motivation, and opportunities in order to perceive that they can be fair during pay setting. [ABSTRACT FROM AUTHOR]

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