Perceived equity of salary policies.

Three systems for distributing yearly salary raises to faculty according to merit were studied to determine which system is judged to be most equitable. In the relative system, persons with equal ment receive equal percentage raises. In the absolute system, persons with equal ment receive equal raises In the adjustment system, persons who are equally underpaid receive equal raises In Experiment 1, faculty and undergraduate judges were asked to assign raises to hypothetical faculty from a fixed raise pool. It was found that the assigned raises were greater for the lower paid of two people of equal ment, consistent with the adjustment system. In Expenment 2, faculty and undergraduate judges examined future salanes produced by the three different systems Both groups judged the raises given by the adjustment system to be the most "equitable, just, and fair " and raises given by the relative system to be the least fair. In Expenment 3, faculty members judged salary deserved as a function of merit and years of experience This deservmgness function was used to develop a specific policy for a particular situation, in which raises are proportional to the deviations between actual salary and salary deserved This article compares the perceived equity of three systems for distributing yearly raises to university faculty according to merit The strategy is to model the salaries given by judges who are instructed to assign raises "fairly, " and to compare the judged "fairness" of longitudinal salaries assigned by different systems. The goal of this work is to demonstrate how applied studies can be used to develop a policy for distributing raises that will be deemed to be "fair." Background Concepts of "fairness " or equity have been studied by philosophers and psychologists since the time of the ancient Greeks. Aristotle wrote that rewards should be distributed to individuals m proportion to their merits, fairness is achieved, according to Aristotle, when Note This article was accepted by former Editor John P Campbell