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Dr. Xiaomin Xu
Lecturer in Work, Organisation, and Management
University of Liverpool Management School

Relative salary compared with referent others has well-established implications for employee attitudes and behaviors at work. Yet, how employees process information on comparisons, particularly when internal and external comparison information is incongruent, remains controversial. In this paper we integrate the model of dispositional attribution and equity theory to predict how the incongruence of internal and external salary comparisons affects perceptions of distributive justice and subsequent employee withdrawal behavior. We hypothesized that the effect of salary comparisons on perceived distributive justice follows a hierarchically restrictive schema in which a lower salary in comparison to a referent has a greater effect than a higher salary. This further affects employee withdrawal such as psychological withdrawal, turnover intention and actual turnover. Two studies were conducted to test our hypotheses: a quasi-experimental study (N = 130) and a time-lagged survey (N = 307). Consistent with our framework, we observed that when comparison information was incongruent, information indicating disadvantage more strongly affected perceived distributive justice than did information indicating advantage. Moreover, the impact on perceived distributive justice was negatively related to employee withdrawal. The theoretical and practical implications of these findings are discussed.