Participation and pay

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Abstract
A distinction is made between the technical details of pay plans and the decision process that is used in developing and administering them. Data are presented which show that pay plans which are identical in technical details can produce quite different results in terms of motivation and satisfaction. It appears that when employees are active participants in the development and administration of pay plans, plans are more likely to be successful. Several studies are cited which support this point and it is argued that the reasons for this include the fact that participation increases employee trust of a pay plan. Finally, it is pointed out that pay can serve as a change agent in organization development efforts if the efforts begin with and involve employees participating in pay decisions.