ABSTRACT
Over the past two decades, the debate surrounding variable pay systems has moved on from managing traditional conceptions of occupational equity and fairness in collective bargaining processes, to influencing individual employees’ perceptions of their organisation. This chapter begins with a review of organisational justice theory and highlights the areas where the empirical work reported can make a contribution. It analyses a mixture of qualitative and quantitative data from a semi-structured face-to-face questionnaire conducted with a sample of employees from four medium-sized engineering organisations undergoing pay system change. The chapter then applies and assesses the relative importance of three kinds of justice – distributive, procedural and interactional – arguing that all were important in different ways and concludes with comments on the nature of justice perceptions in SMEs and potential implications for future research. Distributive justice is concerned with the fairness of outcomes from decisions.
