Organisational Inequalities and the Myth of Meritocracy: How They Impede Employee Task Performance?

ABSTRACT Previous studies have overlooked organisational inequalities and their influence on employee task performance. Anchored in equity theory, we address this gap by examining how promotion and compensation inequalities relate to employee task performance. Further, this study examines the myth of meritocracy as an underlying mechanism and overall perceived distributive justice as a boundary condition. Data were gathered from 471 employees and 39 supervisors. The findings reveal that promotion and compensation inequalities negatively impact employees' task performance. Moreover, the study proposes that the myth of meritocracy acts as a mediator in the relationship between promotion and compensation inequalities and employees' task performance. In addition, overall perceived distributive justice moderates the relationship between promotion, compensation inequalities and the myth of meritocracy and indirectly affects employee task performance through the mediating role of the myth of meritocracy. The study extends the literature on organisational inequalities and task performance and also offers practical insights for organisations for interventions to tackle the issues of organisational inequalities.