This article describes and evaluates the substantial literature on the performance-, turnover-, and attitude-related outcomes of pay dispersion. In the past 15 years, compensation researchers have identified and pursued the resolution of well-known theoretical dilemmas about reward allocations and, as a result, have made much progress in terms of understanding the consequences of pay structures. This review explores the evolution of several contingencies of these relationships, including the effects of explained versus unexplained variation in pay, the role of work interdependence, and the nature of other pay-system characteristics. The article concludes with a summary evaluation, the proposal of several stylized facts about the consequences of pay dispersion, and a research agenda to aid researchers in addressing unresolved issues in the literature.


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  • Article Type: Review Article
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