Unfair rewards, poorly performing organizations and perceptions of deservingness as explanations of diminished job performance

Abstract

PurposeThis study aims to detail how employees’ experience of distributive injustice may compromise their job performance, with specific attention to how this detrimental process may be explained in part by their beliefs about organization-level underperformance and moderated by their own psychological entitlement.Design/methodology/approachThe research hypotheses were tested with three-round, time-lagged data collected among employees and their supervisors.FindingsA critical channel through which employees’ perceptions that their organization’s reward system is unfair translates into thwarted job performance is a conviction that their organization does not meet its own performance targets. As a mediator, such organizational underperformance beliefs have particularly salient effects on employees who believe they are more deserving than others.Practical implicationsThis study gives HR managers insights into how they can reduce the danger that unfair reward practices escalate into a reduced propensity by employees to complete their job tasks diligently. HR managers should make employees aware of their possible entitlement and discourage them from expecting that things always must go their way.Originality/valueThis research unpacks the connection between distributive injustice and job performance, by delineating the unique roles of two pertinent factors (organizational underperformance beliefs and psychological entitlement) in this connection.