The decentralisation of the Australian industrial relations system gives organisations the power to make choices about the design and operation of pay systems. One factor that may influence the choice of system is the pay adjustment preferences of its employees. This paper examines the antecedents of the pay adjustment preferences of 2909 white-collar workers (union and non-union) employed in a large public sector research institution. Pay adjustments based on contribution (individual and group performance) and needs (cost of living, seniority and pay in comparable organisations) are examined. Overall the study finds higher levels of support for the needs-based adjustments. Job security, salary, the availability of adequate resources, role ambiguity, union status and the last performance rating were all found to exert a significant influence on the level of support for each of the five pay adjustment criteria.
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