Horizontal Pay Dispersion and Organizational Performance: A MetaAnalysis

Pay dispersion, one such pay structure property, has received increasing attention in management literature. However, there is currently no consistent evidence on the relationship between pay dispersion, especially horizontal pay dispersion, and organizational performance. In view of this, a meta-analysis was conducted to determine the magnitude of the relationship between horizontal pay dispersion and organizational performance, and test the moderating effect of five measurement characteristics (i.e., horizontal pay dispersion types, organizational performance types, horizontal pay dispersion measures, data source of pay and organizational performance, and data structure) and three sample characteristics (i.e., Location, industry, and job level) on the relationship. Through literature search, screening and coding, 37 studies (including 44 independent samples, 86 effect sizes, N = 82632) were identified. Results show that there is no statistically significant correlation between horizontal pay dispersion and organizational performance, and the strength of this relationship significantly varies across different types of horizontal pay dispersion and organizational performance.