earticle

영어

Over the past decade, scholars have paid attention to the effect of pay dispersion on individual, team, and organizational outcomes. To fully understand the nature and effect of pay dispersion, we provide a comprehensive and critical review on pay dispersion research. We begin with an overview of theoretical definitions and perspectives of pay dispersion. Pay dispersion is defined as variation of pay level between individuals in an organization. More specifically, pay dispersion can be categorized into vertical and horizontal pay dispersion: vertical pay dispersion is referred to as differences in pay level across jobs or hierarchical level, while horizontal pay dispersion indicates differences in pay level within jobs or organizational levels. We collected pay dispersion studies from domestic journals and international journals in Financial Times Top 50 and review theoretical and empirical evidence. Based on our review, we found that research on pay dispersion mainly used two theoretical perspective: tournament theory and equity theory. Tournament theory suggests that more pay dispersion can enhance effort levels of employees because the wide variation of pay facilitates greater employees' effort and competition. In addition, this theory also argues that pay dispersion can facilitate the employee sorting, in which winners stay and losers leave their organizations. Hence, based on this theoretical perspective, pay dispersion may produce positive impact on organizational outcomes. However, based on equity theory, wide pay dispersion reduces pay equity perception, which negates employees' motivation and commitment, and thus may generate negative organizational outcomes. In the empirical studies we collected, we identified mixed results for the relationship between pay dispersion and organizational outcome variables. For example, it is not clear whether pay dispersion generates positive or negative organizational outcomes. Although some studies have explained the mixed effects based on different types of pay dispersion (vertical or horizontal pay dispersion), the classification also does not clearly uncover the clear effects of pay dispersion on organizational performance. To move forward, we provide future research directions to enrich pay dispersion literature. First, we suggest that pay dispersion research should examine potential mediators and antecedents of pay dispersion. In particular, exploring the mediators can help identifying why pay dispersion positively or negative influences organizational functioning. In addition, the examination for antecedents of pay dispersion is the neglected area of pay dispersion research, and thus future researchers need to investigate the potential antecedents in team or organizational context. Second, research on pay dispersion needs to verify the effect of pay dispersion across different countries or cultural values or in different job categories and at the team level, which may be helpful for identifying why the mixed results occur. Finally, we suggest to use more rigorous measures of pay dispersion to verify the clear effect of pay dispersion in Korean context.