An investigation into pay communication: is ignorance bliss?

Purpose - The paper's purpose is to investigate the relationships between pay communication and referent choice, pay satisfaction and pay equity perceptions. Design/methodology/approach - A sample of 149 employed graduate business students from a variety of organizations were surveyed at two different times, first to assess dependent variables (pay satisfaction and pay equity perceptions), and second to measure perceived pay policies. Findings - Contrary to predictions, increased pay communication was not associated with referent choice, and referent choice was unrelated to pay attitudes. Pay communication was also unassociated with pay satisfaction. However, increased pay communication was found to be negatively related to pay equity perceptions. Research limitations/implications - A two-questionnaire survey methodology was designed to minimize the possibility of common method variance. Because few employers communicate about pay, there was restriction of range for this independent variable, perhaps constraining results. However, the use of multiple employers, even in this student population, constitutes a meaningful sample. Practical implications - Employers should be cautious about what pay information they provide to their employees, since this study suggests that increased pay communication results in lower pay equity perceptions. Originality/value - Research in this area is extremely limited and thus this paper provides a strong foundation for further investigation.