Faculty Publications

Title

An Under-Met and Over-Met Expectations Model of Employee Reactions to Merit Raises

Document Type

Article

Keywords

compensation, expectations, job attitudes, merit pay, pay raises

Journal/Book/Conference Title

Journal of Applied Psychology

Volume

93

Issue

2

First Page

424

Last Page

434

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. © 2008 American Psychological Association.

Original Publication Date

3-1-2008

DOI of published version

10.1037/0021-9010.93.2.424

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