Disadvantaged but not dissatisfied: How agency ameliorates negative reactions to unequal pay

Workers tend to be dissatisfied when their peers receive more than them for doing the same work. The fear of creating such dissatisfaction may cause leaders in organizations to waste resources that cannot be allocated equally between their workers. Here we explore the effectiveness of a procedure designed to reduce such waste by empowering workers with the agency to decide whether or not to pay other workers more. We predict that workers' sense of agency reduces their dissatisfaction with others' better outcomes. Seven studies supported this prediction by demonstrating that agentic participants, who were involved in creating allocations, tended to be more satisfied with others' better outcomes than nonagentic participants, who were not involved in creating allocations. Longitudinal lab studies, measuring real behavior, showed that agentic participants remained more satisfied than nonagentic ones even five weeks after their initial decision. The findings provided evidence for two mechanisms underlying the effect: increased feelings of generosity, and reduced perception of unfairness. We found that the agency procedure was comparable with other fair procedures in its ability to improve worker satisfaction. We discuss our findings in relation to the literatures on social preference, fairness, and voice, and highlight the implications for organizational efficiency.