Peer norm guesses and self-reported attitudes towards performance-related pay

Area of Science:

• Organizational Behavior
• Public Administration
• Behavioral Economics

Background:

• Individuals often perceive themselves and their actions differently from others, a phenomenon with significant implications for social judgment and behavior.
• This self-other perception asymmetry can influence attitudes towards organizational changes and policy implementations.
• Understanding these divergent perceptions is crucial in public sector management, particularly concerning new compensation strategies.

Purpose of the Study:

• To examine Greek public sector employees' attitudes toward Performance-Related Pay (PRP) systems.
• To investigate the divergence between individual employees' attitudes and their perceptions of their peers' attitudes toward PRP.
• To determine if this divergence mediates the acceptance of PRP, controlling for job status.

Main Methods:

• A unique questionnaire-based survey was administered to 520 public sector employees in Greece.
• Econometric analysis was employed to assess attitudes, beliefs about peer expectations, and the mediating role of perception divergence.
• Job status (e.g., manager vs. lower-rank employee) was included as a control variable.

Main Results:

• Employees exhibit heterogeneous attitudes and beliefs regarding the successful implementation of PRP.
• Individuals generally hold less skeptical views about PRP than they attribute to their peers.
• Managers express greater optimism about PRP's success compared to lower-rank employees, yet both groups anticipate more negative peer reactions than their own.

Conclusions:

• A significant self-other perception gap exists among Greek public sector employees concerning PRP.
• This divergence in perceived attitudes, where individuals are more positive than they believe their peers are, plays a role in the acceptance of PRP.
• Managerial optimism contrasts with lower-rank employees' views, highlighting hierarchical differences in perceptions of performance pay systems.