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The Relationship Between Employees’ Objective Internal and External Pay Standing and Their Job Performance: A Within-Person Analysis

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Abstract

Purpose

Researchers have paid little attention to the relationship between employees’ objective internal and external pay standing and their job performance. Moreover, few studies have considered that employees’ objective pay standing is dynamic; that is, it changes over time. In this study, we analyze the relationship between changes in employees’ objective internal and external pay standing and their job performance.

Design/Methodology/Approach

We test the hypotheses using data for players in the National Basketball Association over a period of 12 seasons (n = 4830).

Findings

Decreases in employees’ objective internal and external pay standing are negatively related to their task performance. Furthermore, decreases in employees’ objective internal pay standing, but not in their external pay standing, are negatively related to their contextual performance.

Implications

Analyzing the relationship between changes in employees’ objective internal and external pay standing and their job performance adds to our understanding of the individual-level consequences of pay dispersion.

Originality/Value

This is one of the first studies to analyze the relationship between employees’ objective internal and external pay standing and their job performance. Moreover, this is one of the first studies that considers that employees’ objective internal and external pay standing changes, for example, because the external and internal labor markets change. The study contributes to research on employee compensation and salary, and to research on pay disparities.

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Notes

  1. Although the construct’s contextual performance and (organizational) citizenship behaviors are distinct, they capture similar behaviors (e.g., helping colleagues) (Motowidlo 2000). Therefore, we refer to both constructs.

  2. To check the robustness of the findings, we ran all the analyses with altered parameters (at least 200 min played per season). The results were similar.

  3. Please note: the NBA is an exclusively male competition.

  4. We are indebted to an anonymous reviewer for this suggestion.

  5. We are indebted to an anonymous reviewer for this suggestion.

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Acknowledgments

We would like to thank Guest Editor Brian Lyons and the two anonymous reviewers for their insightful comments and suggestions that helped us to improve this paper. We further acknowledge the helpful comments from Benjamin Haarhaus on a previous version of the paper.

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Authors and Affiliations

  1. Faculty of Business Administration and Economics, Heinrich Heine University Duesseldorf, Universitaetsstrasse 1, 40225, Duesseldorf, Germany

    Jost Sieweke & Stefan Süß

  2. Holy Fashion Group, Kreuzlingen, Switzerland

    Bianca Köllner

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  1. Jost Sieweke
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  2. Bianca Köllner
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  3. Stefan Süß
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Correspondence to Jost Sieweke.

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Sieweke, J., Köllner, B. & Süß, S. The Relationship Between Employees’ Objective Internal and External Pay Standing and Their Job Performance: A Within-Person Analysis. J Bus Psychol 32, 533–546 (2017). https://doi.org/10.1007/s10869-016-9457-6

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