Ignorance Is Bliss, or Is It? The Effects of Pay Transparency, Informational Justice and Distributive Justice on Pay Satisfaction and Affective Commitment

Abstract

Pay transparency—open access to comparative wages—may help reduce wage discrepancies and otherwise benefit organizations. A 2 × 2 × 2 between-subjects factorial design was used to test the effects of pay transparency, informational justice and distributive justice on pay satisfaction and affective commitment. Case scenarios were developed to manipulate these variables and test main effect and interaction hypotheses. Full-time employees in the United States (N = 293) were recruited from Amazon’s MTurk. Results showed main effects of pay transparency and distributive justice on both pay satisfaction and affective commitment; an informational justice effect was revealed on affective commitment. Pay transparency had a larger effect on pay satisfaction when distributive justice was low than when it was high. Exploratory analyses revealed an interaction between pay transparency, gender and race on pay satisfaction. This study confirmed positive consequences of pay transparency policies, which are proposed to be a component of informational justice.