The Influence of the Tri-reference Points on Fairness and Satisfaction Perception

Area of Science:

• Organizational Behavior
• Psychology
• Economics

Background:

• Fairness and satisfaction are crucial for employee well-being and performance.
• Tri-reference point (TRP) theory suggests that perceptions are influenced by minimum requirements (MR), status quo (SQ), and goal (G).

Purpose of the Study:

• To investigate the influence of MR, SQ, and G on pay fairness and satisfaction.
• To examine how implicit and explicit manipulation of reference points affects these perceptions.
• To understand the role of social comparison in conjunction with reference points.

Main Methods:

• Three laboratory experiments were conducted.
• Reference points (MR, SQ, G) were manipulated implicitly and explicitly.
• Participants received salary offers relative to a peer's salary (lower, equal, higher).

Main Results:

• Explicitly set reference points significantly interacted with social comparison to influence fairness and satisfaction.
• Salaries below MR resulted in very low fairness and satisfaction, regardless of social comparison.
• Salaries above G led to higher fairness and satisfaction, even with disadvantageous inequality.
• Explicitly communicated reference points had a greater impact than implicit ones.

Conclusions:

• Reference points, particularly MR and G, play a critical role in pay perception.
• Explicitly defined reference points enhance their influence on fairness and satisfaction judgments.
• Understanding these reference points is key for designing equitable pay systems.