Life Isn’t Always Fair: Using Inducements & Contributions to Predict Employee Satisfaction

Topic: Employee Satisfaction, Evidence-Based Management, Rewards
Publication: Journal of Applied Psychology (JUL 2011)
Article: Promised and Delivered Inducements and Contributions: An Integrated View of Psychological Contract Appraisal
Authors: Lambert, L. S.
Reviewed By: Thaddeus Rada

One of the most common complaints an employee may have with their employing organization is that they are not be fairly or adequately compensated for the contributions that they are putting into the company. A complaint of this type gets down to the concept of a psychological contract, which consists of inducements and contributions. Both of these come in two “varieties,” promised and delivered. Promised inducements or contributions are commitments that an organization or an employee, respectively, commit to providing to the other. Delivered inducements or contributions are what the organization or employee actually provide to the other, which may deviate from the promised inducement or contribution.

Together, the balance, or lack thereof, between these four components determines the overall quality of the psychological contract between an employee and the organization they work for. The current study, by Lisa Schurer Lambert, addresses a gap in the psychological contract literature: the comparison, by employees, of inducements to contributions, particularly with respect to the weight that employees give to each component.

The author addresses how three different models can be used to compare inducements to contributions. Using the first framework, the discrepancy model, comparisons are made by directly comparing what is promised to what is received. The second model, the equity model, assesses the extent to which the employee feels the balance between work and pay is fair. Finally, the needs model evaluates the psychological contract to the extent that it meets an employee’s “needs”: things that benefit their physical or psychological survival and well-being.

The author conducted an experiment in which student participants took park in a clerical task for monetary compensation. At various times during their participation, participants performed a variable amount of work for variable compensation. At times, the work load (contributions) and compensation (inducements) matched standards the participants had agreed upon ahead of time. At other times, the workload was heavier or lighter than they anticipated, and the inducements were larger or smaller. The author found that the needs model was most effective at predicting the participants’ satisfaction with the task. She concluded by noting that these findings might be useful in a few ways. First, simply delivering on promises, from the employer’s perspective, may not be enough to satisfy employees. If the raw value of what employees are receiving is insufficient to meet their needs (i.e. their pay it too low for them to support themselves), then the fact that the promised compensation is being received is irrelevant to an employee’s satisfaction. Additionally, these results suggest that altering an employee’s psychological contract (by changing inducements or expected contributions) may be feasible in many cases. As long as the new “terms” of the “contract” meet the needs of the employee, the fact that the new terms deviate from the initial contract is not likely to be a problem.

Lambert, L. S. (2011). Promised and delivered inducements and contributions: An integrated view of psychological contract appraisal. Journal of Applied Psychology, 96, 695-712.