What matters more in pay satisfaction? Pay information, pay transparency and organizational justice

Purpose Little is known about the potentially differential effects of internal and external sources of pay information on employee perceptions of pay fairness and pay satisfaction. The current paper develops and tests a conceptual model of the relationships between three types of pay information (i.e. outcome, process and archival), the source of this information (i.e. internal vs external) and pay satisfaction as mediated by organizational justice perceptions (i.e. perceived distributive justice and perceived procedural justice). Design/methodology/approach Using a sample of 643 full-time working adults in the USA, 3 parallel multiple mediation models were computed using the PROCESS tool for SPSS. Findings Results reveal that both outcome pay transparency and process pay transparency are positively related to pay satisfaction as mediated by organizational justice perceptions, with process pay transparency having a stronger relative effect. In contrast, archival pay information search behavior is negatively related to pay satisfaction. Research limitations/implications These findings have important implications for managers interested in providing pay information that is effective in enhancing employee perceptions of fairness and pay satisfaction and are limited by factors including a primarily student-recruited sampling approach and a cross-sectional design. Originality/value This study provides unique contributions to the pay transparency literature by being among the first to explore the relative importance and differential effects of multiple pay information types and sources in a single conceptual model.