Organizational Effects of Inequitable Rewards: Two Experiments in Status Inconsistency

Two organizational experiments were conducted to investigate the effects of overpayment and underpayment. Subjects were confronted with one of two organizational sources of inequitable payment. In one experiment their salary was inconsistent with their officially recognized level of competence; in another, their salary was inconsistent with their level of authority. Students were hired as proofreaders and worked in the actual offices of a publishing company. Status inconsistency was found to exert a significant effect on performance and to a lesser extent on conformity to organizational rules. Underpaid subjects behaved in accordance with equity theory by producing work of a lower level of quality; however, overpaid subjects did not behave consistently with the theory.