Fairness Conceptualizations and Comparable Worth

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<ul><li><p>Journal of Social Issues, Vol. 45, N o . 4. 1989, p p . 81-97 </p><p>Fairness Conceptualizations and Comparable Worth </p><p>Karen A. Hegtvedt Emory University </p><p>What degree of equality or inequality between work and wages is fair? This paper examines wage-setting policies as different conceptualizations of fairness. Focusing particularly on comparable worth as an alternative to existing wage- setting policies, it demonstrates how social psychological approaches to justice contribute to the understanding of these policies. More specifically, it analyzes the contributions of research on distributive justice and procedural justice to understanding the determination of job worth and the dynamics of implementing comparable worth policy. The discltssion i l l umirhs theoretical issues regard- ing the nature of the relationship between individual deservingness, social fair- ness, and social power. Finally, suggestions are offered for future research that links policy with basic theoretical problems. </p><p>Undoubtedly, the wage issue of the 1980s is comparable worth (Kelly &amp; Bayes, 1988). The debate over comparable worth pay equity policies originates in the unexplained variation in wages associated with jobs held primarily by either men or women, i.e., the wage gap. To narrow the gap, comparable worth policy proposes that individuals ought to be paid according to the intrinsic worth of their jobs, as measured by factors such as skill, effort, and responsibil- ity (Hartmann, Roos, &amp; Treiman, 1985). By raising questions about the nature of work and compensation, comparable worth provides a catalyst to evaluate the fairness of wage-setting policies as well as the structure of reward inequalities in American society. </p><p>The concept of comparable worth as well as the dynamics surrounding its promotion are practical examples of issues raised by research in the social psy- </p><p>I would like to thank Mary Brinton, Teny Boswell, the editors of this journal issue, and the </p><p>Correspondence regarding this article should be addressed to Karen A. Hegtvedt, Department of anonymous reviewers for their helpful comments on earlier versions of this paper. </p><p>Sociology, Emory University, Atlanta, GA 30322. </p><p>81 </p><p>0022-453718911200-~81$06 W i I 0 19RY The Society for the Psychological Study of Social lasuer </p></li><li><p>82 Hegtvedt </p><p>chology of distributive and procedural justice. The intent of this paper is to demonstrate that social psychological approaches contribute significantly to the understanding of this major policy issue, and in turn, to show how that policy issue stimulates theoretical developments regarding the relationship between individual deservingness, social fairness, and even social power. </p><p>The first part of the paper reviews general approaches to fairness in wage setting, and it locates comparable worth as one among a number of distribution or justice rules. The second section examines social psychological research rele- vant to application of a comparable worth rule, focusing particularly on the determination of job worth. The third part casts implementation issues in terms of the justice conceptualizations employed by parties to the comparable worth debate, and it illustrates the intermeshing of power processes with justice con- cerns. The paper concludes with research questions, both basic and applied, which are raised by the analysis. </p><p>Distribution Rules, Wage Setting, and Justice </p><p>It is quite common for individuals to apply the idea of fairness to the relationship between work and wages, and to the pay of one individual or group compared to that of another (Hyman &amp; Brough, 1975). Cohen and Greenberg (1982) specify that fairness or, more formally, distributive justice, involves the application of a normative rule to the allocation of resources to recipients (p. 1). A distribution of resources or rewards is just if it corresponds with that specified by the agreed-upon rule (Homans, 1974); the rule, furthermore, should be impartial and consensual (Rawls, 197 1). Although these definitional criteria represent the normative conception of justice discussed by philosophers (Jasso, 1978), the conception begs the fundamental positive question at the crux of the comparable worth issue: What distribution rule do people believe is just in the workplace? </p><p>Distribution rules dictate the way in which rewards are allotted to a circle of recipients. One or a combination of these rules may define justice in a given situation. Theorists (e.g., Deutsch, 1975; Eckhoff, 1974; Leventhal, 1976) have suggested a number of distribution rules. Basically, there are two major types of rules: (1) individual deserving rules, which specify that rewards should be com- mensurate with one or a combination of relevant individual characteristics (e.g., contributions, ability, effort, status, needs); and (2) outcome distribution rules, which specify parameters to define the expected shape of the distribution of rewards prior to the actual allocation. Brickman, Folger, Goode, and Schul (1981) refer to the former as micro and the latter as macro principles of justice, while Jasso (1983) uses the terms just reward function and just reward distribution, respectively, to signify the same ideas and likewise to imply that a rule is normative in a situation. </p></li><li><p>Fairness Concepts and Comparable Worth 83 </p><p>An individual deserving rule, or micro justice principle, takes the form of to each according to hidher [individual characteristic]. Equity (Adams, 1965; Walster, Berscheid, &amp; Walster, 1978) obtains when individuals ratios of out- comes (rewards) to their inputs are equal. Inputs pertain to the combination of individual characteristics deemed reward-relevant in the situation. Comparisons of outcome/input ratios may be local or referential (Berger, Cohen, &amp; Zelditch, 1972; see also Major, this issue). Local comparisons involve two individuals, for example two workers, who assess the equivalency of their wages in terms of their respective skills, job responsibilities, and other relevant indi- vidual-level characteristics; if inputs are similar, the workers should receive the same pay, whereas if inputs are different, the one with higher inputs should receive more pay. Referential comparisons focus on standards defined by a relevant reference group; for example, a word processor compares his or her wages to those generally earned by word processors within the same organization (internal equity) or in other organizations (external equity). </p><p>Most people living in industrial, capitalistic societies accept the equity principle as the basis for wages (Schwinger, 1980). As a type of individual deserving rule, equity guarantees workers a wage commensurate with their contributions (however defined) to the enterprise. The notion of equity, fur- thermore, appears to mirror the human capital model of earnings promoted by economists (see Bergmann, this issue). In principle, existing wage policies and comparable worth share an emphasis on individual deserving and thus appear to represent the same normative conception of justice. But, for the former, contri- butions theoretically are levels of worker productivity (defined at the margins), whereas the latter categorizes individual contributions in terms of job charac- teristics. Furthermore, in practice, the divergence between existing and proposed policies is much greater than these differences in their definitions of contribu- tions suggest, thus creating the widely different positive conceptions of justice that are the foci of the present analysis. </p><p>One source of the divergence lies in the emphasis placed on market factors. Traditional wage systems relying upon neoclassical economics take principles of supply and demand as the basis for determining the value of individuals work contributions, claiming that they set the market price for labor (Mahoney, 1983). In other words, such principles determine the relevance and weighting of inputs and outcomes in the equity formula. The larger the demand for some types of inputs, especially when the supply of those skills is low, the higher the wage; in contrast, low wages characterize jobs for which skills are in low demand and/or the labor supply is high. </p><p>But, in reality, many factors interfere with market-based wage policies: unionization, government regulations, internal labor markets, worker prefer- ences, employer preferences, etc. (Remick, 198 1). The latter three factors raise concerns regarding the relevance and evaluation of contributions and thus the </p></li><li><p>84 Hegtvedt </p><p>calculation of supply and demand. Evaluations of the relative importance of skills generally reflect the social values and biases of a given location and time period (Stinchcombe, 1966) as well as existing policies within organizations (Remick, 1984). In contrast, although comparable worth is sensitive to market factors and internal labor markets, its intent is to decrease the influence of biases and outmoded social values in determining the worth of jobs by focusing more objectively on relevant job contributions. </p><p>A second source of the divergence between concepts of equity defined by existing wage policies and by comparable worth concerns the relationship be- tween the underlying individual deserving rule and institutionalized outcome distribution rules. An outcome distribution rule, or macro principle of justice, ignores individual-level characteristics, focusing instead on group or distribu- tion-level issues. Types of outcome distribution rules include an equal distribu- tion, a distribution that ensures a minimum standard of rewards for all recipients, and subgroup principles dictating that one group should have on the average greater (or lesser) rewards compared to another. The actual income distribution of a society, indicating how many people earn various amounts of money, also represents an outcome distribution rule to the extent that the shape of existing inequalities influences the actual allocation of wages. For example, the actual bimodal distribution of wages in which women, on the average, earn less than men represents a subgroup outcome distribution rule that may influence the wage-setting policies. </p><p>The relationship between individual deserving rules and outcome distribu- tion rules is complex. Under two special conditions, individual deserving and outcome distribution rules produce the same distribution of outcomes and are thus said to be mutually entailed (Jasso, 1983). First, when selected reward- relevant individual-level and group-level characteristics are distributed similarly within the recipient circle, then the use of either an individual deserving rule or an outcome distribution rule is likely to produce the same result. For example, assuming the absence of sex-segregated occupations, if about half of the popula- tion of a group possesses superior problem-solving skills and the other half does not, compensation according to individual skill level or according to a subgroup principle based on the two general skill levels should produce the same distribu- tion of wages. </p><p>Second, when the initial selection of an individual deserving rule creates a new form of outcome distribution rule based on the repeated aggregation of individual deserving levels of just rewards, mutual entailment exists. For example, to the extent that people receive wages commensurate with their educa- tion levels, the aggregation of the resulting wage levels produces an income distribution that represents a consistent outcome distribution rule. The process of institutionalizing such a macro justice principle evolves over time as individuals come to judge as fair the distributions resulting from the repeated use of specific </p></li><li><p>Fairness Concepts and Comparable Worth 85 </p><p>individual deserving rules (cf. Berger et al., 1972; Homans, 1974; Jasso, 1983). The resulting outcome distribution rule promotes the values expressed inherently in the original individual deserving rule and is relatively insensitive to the biases it may represent. </p><p>This reasoning provides the basis for an explanation of the wage gap re- maining after controlling for human capital investments such as education and experience (Hartmann &amp; Treiman, 1983; England &amp; Farkas, 1986). If the indi- vidual deserving rule guiding existing wage-setting policies ever explicitly or implicitly included sex as a reward-relevant characteristic or as a factor by which to weight all other contributions, the contributions made by women would have been judged of lower worth because of the historical social devaluation of work- ing women and of womens work (Remick &amp; Steinberg, 1984). As a result of such valuations, the aggregation of individual deserving levels produced a wage gap between the wage distributions for men and women that became institu- tionalized as an accepted bimodal subgroup principle of justice. </p><p>Further evidence of the mutual entailment represented in the gender-based wage gap is the existence of job evaluation schemes that justify existing wage hierarchies (Remick, 1984; Steinberg, 1984). For example, to justify a wage hierarchy that benefits males, a job evaluation system may include primarily the compensable factors found primarily in mens jobs but omit some of those found, primarily in womens jobs. Thus, administrative practices maintain the mutual entailment represented by the institutionalized subgroup principle of justice and support the status quo. Such mutual entailment may characterize organizations with internal labor markets that are less subject to external market forces, includ- ing forces that may actually erode biases. </p><p>The primary source of threats to mutual entailment is changes in the selec- tion and distribution of reward-relevant characteristics (Jasso, 1983). For exam- pie, if policymakers dismissed education ievels as reward-relevant criteria, then existing income distributions based on education would be an insufficient criteri- on for establishing wage hierarchies. Or if everyone obtained high levels of education, then the existing education-based subgroup outcome distribution rule would no longer be relevant. In addition, when there are insufficient resources to give people the rewards they deserve under existing rules, these types of rules fail to produce correspondent distributions (Cohen, 1979). A situation in which funds are inadequate to compensate all college-trained employees at the existing rate of compensation for such highly educated workers exemplifies this condi- tion. The emergence of either condition fuels conflict between individuals or groups preferring different distribution principles and may stimulate changes in existing wage-setting policies. </p><p>Such conflicts are now occurring between comparable worth advocates and proponents of existing wage policies. Consistent with the first condition for the disruption of mutual entailment, the policy of comparable worth redefines re- </p></li><li><p>86 Hegtvedt </p><p>ward-relevant Characteristics by emphasizing compensable job factors...</p></li></ul>