The Relative Importance of External,Internal,Individual and Procedural Equity to Pay Satisfaction

This article discusses a study that surveyed nearly 500 faculty drawn from different disciplines at more than 100 four-year U.S. colleges and universities. The primary purpose of the study was to examine the relative importance of four forms of compensation equity to the pay satisfaction of academic faculty. Procedural equity was found to be the most important form of fairness, followed in order by individual equity, external equity and internal equity. Thus, the perceived fairness of the decision-making processes and procedures that are used to distribute pay appears to be more important to employees than the actual amount of pay they receive. The importance of the equity forms to the overall pay satisfaction of faculty was found to be moderated by gender, age, academic rank, tenure status, institution size and type of discipline. The implications of the current findings for organizational pay policies and practices are discussed.