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An under-met and over-met expectations model of employee reactions to merit raises.

Authors
Type
Published Article
Journal
The Journal of applied psychology
Publication Date
Volume
93
Issue
2
Pages
424–434
Identifiers
DOI: 10.1037/0021-9010.93.2.424
PMID: 18361641
Source
Medline
License
Unknown

Abstract

The authors developed a model of how raise expectations influence the relationship between merit pay raises and employee reactions and tested it using a sample of hospital employees. Pay-for-performance (PFP) perceptions were consistently related to personal reactions (e.g., pay raise happiness, pay-level satisfaction, and turnover intentions). Merit pay raises were strongly related to reactions only among employees with high raise expectations and high PFP perceptions. The interactive effects of under-met/over-met expectations and PFP perceptions were mediated by the extent to which participants saw the raise as generous and they were happy with the raises they received. The authors discuss the implications of these findings for expectation-fulfillment theories, merit pay research, and the administration of incentives.

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