'Muddying the waters? The role of distributive justice and organization trust in the relationship between pay secrecy and employee turnover'
Building on uncertainty management theory, we develop and test a model explicating how and when secrecy in pay communication may affect employee turnover-related outcomes (i.e., employee voluntary turnover intentions and firm turnover rates). Underlying this model is the notion that employees triangulate perceptions of pay communication practice with their own or others’ perceptions of distributive justice as a basis for assessments of organizational trustworthiness, with the latter serving as an important driver of voluntary turnover intentions and behaviour. Results of two studies (Study 1 at the individual level, and Study 2 at the firm level) indicate that rather than being universal, the relationship between pay secrecy and turnover is contingent upon perceptions of outcome fairness (i.e., distributive justice), with turnover intentions (at the individual level) and turnover rates (at the firm level) sensitive to the degree of secrecy in pay communication only under conditions of higher levels of distributive justice. The implications of the findings for research and practice are discussed.
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