The equity theory proposes that individuals who perceive inequity will seek to restore equity by indulging in appropriate behaviors. When applied to the workplace, the theory implies that employees who perceive inequity may seek to restore equity by, perhaps feeling hostile to the organization or their co-workers, which may result in the employee not performing as usual. The current study is conducted on the basis of the equity theory. The study explored the relationship between perceived pay equity and individual job performance among lecturers in selected public and private universities in Ghana. The main proposition of the study is that Ghanaian lecturers are more likely to indulge in dysfunctional behaviors when they perceive inequity in their pay system.
The study adopted a descriptive survey design. A total of 313 research subjects were drawn from the target population using the stratified sampling technique. However, two hundred and seventy eight completed questionnaires were returned. Data were also collected using the in-depth interview guide and a focused group discussion. The quantitative data was analyzed by using the Statistical Product and Service Solution’s Version 19.0, while the content analysis, based on the literature review and the various comments made by respondents in both the interview and focused group discussion was used for the qualitative data analysis.
The findings of this study supported eight of the nine hypothesis tested. In support of previous research, the results show that the perception of equity in an employee’s pay system is a significant factor in his or her job performance. It was therefore, recommended that management should pay adequate attention to equity in the design and implementation of their pay systems. Moreover, issues about the reward system should be carefully communicated to employees in order to eliminate unnecessary employee perceptions of inequity in the pay system. Keywords: Perceived Pay Equity, Motivation, Job Satisfaction, Job Performance.