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The effect of intra-workplace pay inequality on employee trust in managers: Assessing a multilevel moderated mediation effect model

Schulz, Felix LU orcid ; Valizade, Danat and Charlwood, Andy (2022) In Human Relations 75(4). p.705-733
Abstract
High levels of economic inequality are widely viewed as a key challenge facing both
advanced industrial and developing economies. Country-level studies have consistently
shown a negative link between income inequality and trust in others. This is typically
attributed to greater social distance within unequal societies. Do we observe similar
relationships within organisations? This is an important question because employee
trust is associated with important outcomes for workers and organisations. We
answer it by investigating the relationship between pay inequality and employee
trust in managers at the workplace level using large-scale nationally representative
matched employer–employee data from Britain. The... (More)
High levels of economic inequality are widely viewed as a key challenge facing both
advanced industrial and developing economies. Country-level studies have consistently
shown a negative link between income inequality and trust in others. This is typically
attributed to greater social distance within unequal societies. Do we observe similar
relationships within organisations? This is an important question because employee
trust is associated with important outcomes for workers and organisations. We
answer it by investigating the relationship between pay inequality and employee
trust in managers at the workplace level using large-scale nationally representative
matched employer–employee data from Britain. The article uses innovative machine
learning methods to demonstrate a curvilinear relationship between pay inequality
and trust. When pay inequality is at low to moderate levels, increasing inequality is
associated with increasing employee trust but when pay inequality passes a certain
threshold the relationship turns negative. The relationship is mediated by employees’
perceptions of manager fairness and moderated by employee collective voice. The
implications of these findings for theory, research methodology, practice and future
studies are discussed. (Less)
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author
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publishing date
type
Contribution to journal
publication status
published
subject
keywords
employee voice, equity theory, fairness, machine learning, pay ineqaulity, trust
in
Human Relations
volume
75
issue
4
pages
705 - 733
publisher
SAGE Publications
external identifiers
  • scopus:85101224601
ISSN
0018-7267
DOI
10.1177/0018726721994193
language
English
LU publication?
no
id
cf79ba63-96b8-4255-91f1-8c6b71724ecd
date added to LUP
2025-01-27 16:24:36
date last changed
2025-04-22 10:05:22
@article{cf79ba63-96b8-4255-91f1-8c6b71724ecd,
  abstract     = {{High levels of economic inequality are widely viewed as a key challenge facing both<br/>advanced industrial and developing economies. Country-level studies have consistently<br/>shown a negative link between income inequality and trust in others. This is typically<br/>attributed to greater social distance within unequal societies. Do we observe similar<br/>relationships within organisations? This is an important question because employee<br/>trust is associated with important outcomes for workers and organisations. We<br/>answer it by investigating the relationship between pay inequality and employee<br/>trust in managers at the workplace level using large-scale nationally representative<br/>matched employer–employee data from Britain. The article uses innovative machine<br/>learning methods to demonstrate a curvilinear relationship between pay inequality<br/>and trust. When pay inequality is at low to moderate levels, increasing inequality is<br/>associated with increasing employee trust but when pay inequality passes a certain<br/>threshold the relationship turns negative. The relationship is mediated by employees’<br/>perceptions of manager fairness and moderated by employee collective voice. The<br/>implications of these findings for theory, research methodology, practice and future<br/>studies are discussed.}},
  author       = {{Schulz, Felix and Valizade, Danat and Charlwood, Andy}},
  issn         = {{0018-7267}},
  keywords     = {{employee voice; equity theory; fairness; machine learning; pay ineqaulity; trust}},
  language     = {{eng}},
  number       = {{4}},
  pages        = {{705--733}},
  publisher    = {{SAGE Publications}},
  series       = {{Human Relations}},
  title        = {{The effect of intra-workplace pay inequality on employee trust in managers: Assessing a multilevel moderated mediation effect model}},
  url          = {{http://dx.doi.org/10.1177/0018726721994193}},
  doi          = {{10.1177/0018726721994193}},
  volume       = {{75}},
  year         = {{2022}},
}