Abstract
Compensation systems are an integral part of the relationships organizations establish with their employees. For many years, researchers viewed pay systems as an efficient way to bring market-like labour exchanges inside organizations. This view suggested that only economic considerations matter for understanding how compensation systems effect organizations and their employees. Advances in organizational research, particularly those focused on issues of justice and fairness, suggest that the fully understanding the outcomes of compensation systems requires examining their psychological, social, and moral effects.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Brockner, J., P. A. Siegel, J. P. Daly, T. Tyler and C. Martin: 1997, 'When trust matters: The moderating effect of outcome favorability', Administrative Science Quarterly 42, 558–583.
Browns and Huber: 1992, Journal of Applied Psychology.
Cropanzano, R., Z. S. Byrne, D. R. Bobocel and D. E. Rupp: 2001a, 'Moral virtues, fairness heuristics, social entities, and other denizens of organizational justice', Journal of Vocational Behavior 58, 164–209.
Cropanzano, R., D. E. Rupp, C. J. Mohler and M. Schminke: 2001b, 'Three roads to organizational justice', in G. Ferris (ed.), Research in Personnel and The Ethics of Compensation Systems 151 Human Resource Management, Vol. 20 (JAI Press, Greenwich, CT), pp. 1–113.
Fishman, C: 1999, 'Sanity, Inc.', Fast Company 21, 84–89.
Folger, R. and R. Cropanzano: 1998, Organizational Justice and Human Resource Management (Sage Publications, Thousand Oaks, CA).
Gittell, J. H.: 2003, The Southwest Airlines Way (McGraw Hill, New York).
Greenberg, J. and R. Cropanzano: 2001, Advances in Organizational Justice, (Stanford University Press, Stanford, CA).
Lavelle, L.: 2002, Executive compensation. Business Week, April 15, (http://www.businessweek.com/magazine/content/02_15/b3778012.htm).
Meara, N. M.: 2001, 'Just and virtuous leaders and organizations', Journal of Vocational Behavior 58, 227–234.
Milkovich, G. T. and J. M. Newman: 2005, Compensation, 8th edition (McGraw Hill Iriwn, Boston).
O'Reilly, C. A., III and J. Pfeer 2000, Hidden value: How great Companies Achieve Extraordinary Results with Ordinary People (Harvard Business School Press, Boston).
Rhoades, L. and R. Eisenberger: 2002, 'Perceived organizational support: A review of the literature', Journal of Applied Psychology 87, 698–714.
Rousseau, D. M. 1995, Psychological contracts in organizations (Sage Publications, Thousand Oaks, CA).
Turillo, C. J., R. Folger, J. J. Lavelle, E. E. Umphress and J. O. Gee: 2002, 'Is virtue its own reward? Self-sacrificial decisions for the sake of fairness', Organizational Behavior and Human Decision Processes 89, 839–865.
Verplanken, B. and R. W. Holland: 2002, 'Motivated decision making: Effects of activation and self-centrality of values on choices and behavior', Journal of Personality and Social Psychology 82, 434–447.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Bloom, M. The Ethics of Compensation Systems. Journal of Business Ethics 52, 149–152 (2004). https://doi.org/10.1023/B:BUSI.0000035910.90075.3d
Issue Date:
DOI: https://doi.org/10.1023/B:BUSI.0000035910.90075.3d