Making sense of egalitarian pay: Reconceptualising its treatment in organisations

• Published date: 01 April 2020
• Date: 01 April 2020
• Author: Kimberly Merriman,John Deckop,David Morand
• DOI: http://doi.org/10.1111/1748-8583.12264

REVIEW ARTICLE

Making sense of egalitarian pay:

Reconceptualising its treatment in organisations

David Morand

1

| Kimberly Merriman

2

| John Deckop

3

1

School of Business Administration,

Pennsylvania State University

2

Manning School of Business, University of

Massachusetts –, Lowell

3

Fox School of Business, Temple University

Correspondence

Dr. David Morand, School of Business

Administration, Pennsylvania State

University - Harrisburg, 777 W. Harrisburg

Pike, Middletown, PA 17011, USA.

Email: dam9@psu.edu

Abstract

In this paper, we offer an intraorganisational sensemaking

perspective on how organisational members interpret egali-

tarian forms of pay. Specific focus is given to managerial

(non)communication of diverse rationales for egalitarian pay

practices. We integrate a wide range of research and

descriptive accounts to organise schema-relevant concepts

into a typology of rationales that inform the sensemaking

process, as ultimately observed in employee receptivity and

response to egalitarian pay practices. The culmination of

our conceptual development is a prescriptive framework on

organisational communication of egalitarian pay practices to

its members. We offer a future research agenda and propo-

sitions to test the validity of this developed framework and

conclude with a discussion of limitations and theoretical

and practical implications.

KEYWORDS

egalitarian pay practices, human resource strategy, sensemaking,

organisational communication

1|INTRODUCTION

This is a conceptual paper about egalitarian pay in organisations, and in particular, how such pay practices are vari-

ously formed and effectively communicated. We take a sensemaking perspective (Brown, Colville, & Pye, 2014;

Maitlis & Christianson, 2014; Weick, 2012) by emphasising how members interpret, largely through social processes,

egalitarian forms of pay. Specific focus is given to how managerial communication of diverse rationales for egalitarian

pay practices can inform this process and positively affect the meaning members attach to these practices –ulti-

mately key to their receptivity and response. A sensemaking perspective is relevant when there is ambiguity, novelty

or equivocality in ones environment or circumstances. This applies in the present case in that egalitarian pay

Received: 24 August 2018 Revised: 5 August 2019 Accepted: 6 September 2019

DOI: 10.1111/1748-8583.12264

Hum Resour Manag J. 2019;1–18. wileyonlinelibrary.com/journal/hrmj © 2019 John Wiley & Sons Ltd 1

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practices are generally not legitimated in the workplace, in comparison with strongly institutionalised performance

pay practices, more common in cultures such as the U.S.

We position our conceptual treatment of egalitarian pay practices as particularly germane to human resource

management and its scholarly discourse by taking an intraorganisational focus. The existing empirical organisational

literature on egalitarian pay rests on rather oversimplified theoretical justifications related to harmony and coopera-

tion, and is countered by similarly oversimplified established views of equity that call for unequal pay for unequal

contributions (Shaw, 2014). Despite progress over the past decade or more in identifying contingencies and subtle-

ties with regards to the pay-performance relationship (see Shaw, 2014 review), empirical research focuses on specific

moderating variables rather than a broader understanding of the sensemaking process. We integrate a wide range of

diverse findings related to this topic along with descriptive accounts in order to derive a typology of egalitarian pay

justifications within organisations. Once established, the typology permits us to develop a prescriptive ‘sensegiving’

framework on organisational communication of egalitarian pay practices to its members.

Our approach is in keeping with the important role played by employee sensemaking and shared perceptions of

human resource practices in determining the strength of overall human resource systems (e.g., Farndale, Hope-

Hailey, & Kelliher, 2011; Ostroff & Bowen, 2016). It is also the case that egalitarian related pay issues are of great

contemporary concern. This is exampled, for instance, by a rising public and regulatory focus on the ratios between

CEOs and the lowest paid workers of organisations. We believe these trends call for greater theory development rel-

ative to the functional role of egalitarian pay practices within organisations.

As noted, a wide range of literature is integrated in deriving this conceptual treatment. However, although we

do provide an overview of relevant streams of research, it is also important to emphasise that this is at its core a sen-

semaking paper, not a paper on organisational fairness or social justice, though each contributes language and certain

points of reference for the emergence of sensemaking around egalitarian pay practices in organisations.

The overall flow of this paper is as follows. First, we outline the sensemaking perspective, and discuss why such

a perspective is pertinent to an exploration of egalitarian pay practices. Next, in contrast to standard con-

ceptualisations of employee inputs as operationalised under a distributive “equity”lens to justify the presence or

absence of pay differentials, we offer a more nuanced and well-specified view of inputs that can inform sensegiving

and sensemaking. Next, to establish construct clarity of egalitarian pay outcomes, we describe relevant philosophical

underpinnings, and also describe how egalitarian pay may be understood in terms of relative (as opposed to absolute)

equality, that is, outcomes that intentionally veer away from proportionality. We then discuss the crucial role played

by organisations transparency about, and strategic communication of pay practices, particularly as these apply to

sensemaking relative to egalitarian pay. Finally, putting the above together, we examine how diverse con-

ceptualisations of inputs in concert with their framing by organisations may ultimately engender receptivity and pro-

ductive response to egalitarian pay practices on the part of organisational members. We conclude with a guiding

agenda, including propositions, for future research exploration.

2|THE ROLE OF SENSEGIVING IN EGALITARIAN PAY

Sensemaking is the process by which individuals collectively form understanding and meaning of a shared experi-

ence, which ultimately plays a central role in the determination of human behaviour (Weick, 1995, 2005). This paper

constitutes an application of the first critical stage in the sensemaking process, that is, “sensemaking occurs when a

flow of organisational circumstances is turned into words and salient categories”(Weick, 2015). However, sen-

semaking is more than a cognitive process, it also often entails a communication aspect of sensegiving (Kramer,

2017). Sensegiving provides explicit descriptions and plausible explanations for others of the otherwise equivocal

cues in the organisational environment (Weick, 1995). Organisations can effectively guide the sensemaking process

of its members and other stakeholders through structured, intentional sensegiving accounts of organisational events

(Schnackenberg, Bundy, Coen, & Westphal, 2019).

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