Overpayment: Perceived qualifications and financial compensation

Authors


  • We thank Dr. Carl Weick, Dr. G. B. Cohen, Drs. R. W. Meertens and Drs. W. L. Buitelaar for their comments on an early version of this paper.

Abstract

In this study expectancy and equity theory were compared.

An experiment was carried out on the effect of overpayment. Overpayment was manipulated by varying perceived input (perceived qualifications) and received outcome (financial compensation). The experiment consisted of a 2 × 3 design: two levels of payment (4 guilders p.h. and 8 guilders p.h.) and three levels of perceived qualifications (high, medium, low). Sixty-six subjects were hired through the students placement service to decode personality questionnaires.

Overpayment by manipulation of monetary rewards did not lead to greater production, as was hypothesized by Adams' equity theory (1965). As far m overpayment has been manipulated by perceived qualifications for the job the data confirmed equity theory. Several other theories (e.g. expectancy theory: Lawler, 1968b) can explain both results.

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