A selection from Stockholm University publication database

• “It’s [Not] All ‘Bout the Money”

  2020. Alexander Nordgren Selar (et al.). Scandinavian Journal of Work and Organizational Psychology 5 (1)

  Article

  The use of performance-based pay is increasing rapidly, but empirical evidence on how and why it relates to job performance, as well as its relative strategical importance, remains unclear. The present study examined the relative importance of performance-based pay variables and support of psychological needs variables for task and contextual performance in a sample of 582 white-collar employees in Sweden. Multiple regression results, based on survey and register data, showed that the instrumentality of the pay system related to lower levels of task and contextual performance. However, supplementary relative weight analysis (RWA) showed that, in relative terms, instrumentality of the pay system was of minor importance for performance. Performance-based pay-raise amount was positively related to contextual performance but not predictive of task performance. Procedural pay-setting justice was unrelated to both outcomes. Among the support of psychological needs variables, feedback and job autonomy had positive associations with both outcomes while social support from colleagues was not predictive of performance. Considering the explained variance (16–17%), the performance-based pay variables combined accounted for up to a third (12.6–29.2%) while support of psychological needs variables accounted for more than half of the explained variance (56.1–68.1%) in task and contextual performance. The results indicate that organizations would benefit from putting support of psychological needs to the forefront of their motivational strategies as a complement to administrating complex compensation systems.

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• Pay justice attention! A systematic literature review of antecedents and consquences of pay justice

  2019. Helena Falkenberg (et al.). Abstract Book of the 19th European Association of Work and Organizational Psychology Congress, 1149-1149

  Conference

  Purpose: Employee perceptions of pay as fair have been suggested to be important for motivation and performance. This circumstance, together with an increase in pay-systems where annual pay raises in part are based on employees’ performance, has directed attention to the justice of pay. The aim of this systematic literature review was to describe research focusing on (1) what contributes to perceptions of pay justice and (2) the potential consequences of pay justice.

  Methodology: Literature search in large databases were performed. Major search terms were “pay justice” and” pay-related justice”, supplemented with searches of concepts that emerged as important such as “performance evaluation” and “feedback”. Priority was given to studies published in the year 2000 and later.

  Results: In terms of predictors, performance assessments, knowledge of pay-setting criteria, feedback, performance appraisal and the supervisor´s ability to fulfil the requirements as pay-setters, were important for employee perceptions of pay justice. Consequences of pay justice were less studied but a positive relation with pay satisfaction was reported.

  Limitations: The literature search was done on pay justice specifically. This means that studies focusing on organizational justice were generally not included, even if such studies could include pay.

  Research/Practical Implications: The results provide insights regarding how different aspects of the pay-setting process relate to pay justice and indicate that less is known about the consequences of pay justice.

  Originality/Value: Although several reviews and meta-analyses concerning organizational justice in general exists, to our knowledge, this is the first review focusing on pay justice specifically.

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• Psychological perspectives on performance-based compensation

  2022. Alexander Nordgren Selar.

  Thesis (Doc)

  In the past decades, the contributions of individuals have come into greater focus on all levels of employment in many types of organizations. For example, this is manifested through an increased use of individual performance-based pay setting, where individual evaluations of employees’ contributions lead to diversified pay raises among peers. The reasons for using such a pay system include that it is expected to motivate better performance and inspire those who perform well to remain with the organization. Criticism of this type of pay system, however, has come from a motivation theory perspective, for example, along with assertions that it is too resource intensive. The general aim of this dissertation was to contribute to the present research regarding how pay-related perceptions relating to these pay systems may encourage work and employees’ well-being. Study I aimed at investigating how various aspects of individual performance-based pay setting (instrumentality of the pay system, performance-based pay-raise amount, and procedural pay-setting justice) and various work design factors addressing employees’ psychological needs (feedback, job autonomy, and social support from colleagues) relate to employee task and contextual performance. Results of hierarchical multiple regression analyses supplemented by relative weight analysis showed that the work design factors – especially job autonomy – evidenced stronger positive relations with employee performance. Study II aimed at identifying groups of employees with similar pay-related characteristics and perceptions of pay setting (regarding pay-levels, perceived horizontal pay dispersion, transactional leadership and procedural pay-setting justice) in the Swedish private sector, and then examining the differences between these groups in regard to work-related (task performance and turnover intention) and health-related outcomes (self-rated health and work-related exhaustion). Latent profile analysis identified six distinct groups. A key finding was that groups characterized by perceptions of low horizontal pay dispersion who also experienced a high pay-setting quality (referring to high levels of transactional leadership and procedural pay-setting justice) – and by high procedural fairness in particular – had the most favorable levels of task performance, turnover intention, and work-related exhaustion. In combination with high pay and high procedural quality, however, high horizontal pay dispersion was associated with fairly decent outcomes, especially in regard to health. Study III aimed at compiling research, especially from a self-determination theory perspective, that concerned how work-related reward systems might encourage work and well-being in organizations by influencing employees’ psychological need satisfaction and motivation types (e.g., autonomous work motivation). It was argued that organizations should lower the saliency of monetary rewards. Instead, they need to design the work, within the limits of the context in which they operate, such that autonomous work motivation is encouraged, thus bringing about maximum well-being and high-performance outcomes. In general, the dissertation maintains that successful individual performance-based pay-setting systems require accurate administration. If not, they may run the risks of discouraging performance, decreasing retention, and lowering employees’ well-being.

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Show all publications by Alexander Nordgren Selar at Stockholm University