10.2190/A0HD-ERMT-0HTY-3AF5 A0HDERMT0HTY3AF5 8 The Disclosure of Executive Pay and Labor Relations: An Organizational Justice Perspective 357 368 20020509 20020509 20020509 20020509 A0HDERMT0HTY3AF5.pdf http://baywood.metapress.com/link.asp?target=contribution&id=A0HDERMT0HTY3AF5 4 David B. Balkin Robert E. Allen University of Colorado, Boulder University of Wyoming, Laramie The disclosure of executive pay is examined from the organizational justice perspective. This perspective suggests that failure to anticipate union reaction to the disclosure of executive pay may adversely affect the relationship between the union and management. Unions may be less willing to ask their members to make sacrifices during times of economic hardship if no sacrifices are made by the top executives in terms of pay. This article provides some cases from the automobile industry to show how executive pay can influence relations with unions. Some suggestions are made to show how management might be able to coordinate executive pay policies with collective bargaining practices. M. C. Jensen and K. J. Murphy, Performance Pay and Top Management Incentives, <i>Journal of Political Economy, 98</i>, pp. 225-264, 1990. J. S. Leonard, Executive Pay and Firm Performance, <i>Industrial and Labor Relations Review, 43</i>:3, pp. 13-29, 1990. L. R. Gomez-Mejia, H. Tosi, and T. Hinkin, Managerial Control, Performance and Executive Compensation, <i>Academy of Management Journal, 30</i>, pp. 51-70, 1987. J. Greenberg, A Taxonomy of Organizational Justice Theories, <i>Academy of Management Review, 12</i>, pp. 9-22, 1987. D. Pauly, An Embarrassment of Riches, <i>Newsweek</i>, pp. 51-52, May 14, 1984. A. Green, UAW Delegates Forge 1990 Bargaining Agenda, <i>AFL-CIO News</i>, June 11, 1990. L. Iacocca, <i>Iacocca: An Autobiography</i>, Bantam Books, New York, 1984. J. R. Deckop, Top Executive Compensation and the Pay-for-Performance Issue, in <i>New Perspectives on Compensation</i>, D. B. Balkin and L. R. Gomez-Mejia (eds.), Prentice Hall, Englewood Cliffs, New Jersey, 1987. A. Patton, Why Incentive Plans Fail, <i>Harvard Business Review, 50</i>:3, pp. 58-66, 1972. E. Lawler, III, <i>Strategic Pay</i>, Jossey-Bass, San Francisco, 1990. P. L. Cochrane, R. A. Wood, and T. B. Jones, The Composition of Boards of Directors and Incidence of Golden Parachutes, <i>Academy of Management Journal, 28</i>, pp. 664-671, 1985. M. Deutsch, Equity, Equality and Need: What Determines Which Value Will Be Used as the Basis of Distributive Justice? <i>Journal of Social Issues, 31</i>, pp. 137-149, 1975. C. E. Sampson, On Justice as Equality, <i>Journal of Social Issues, 31</i>, pp. 45-64, 1975. J. Byrne, The Flap over Executive Pay, <i>Business Week</i>, pp. 90-96, May 6, 1991. R. Folger and C. Martin, Relative Deprivation and Referent Cognitions: Distributive and Procedural Justice Effects, <i>Journal of Experimental Social Psychology, 22</i>, pp. 531-546, 1986. R. Cropanzano and R. Folger, Procedural Justice and Worker Motivation, in <i>Motivation and Worker Behavior</i>, R. M. Steers and L. W. Porter (eds.), McGraw-Hill Inc., New York, pp. 131-143, 1991. G. S. Leventhal, Fairness in Social Relationships, in <i>Contemporary Topics in Social Psychology</i>, J. W. Thibaut, J. T. Spence, and R. C. Carson (eds.), General Learning Press, Morristown, New Jersey, 1976. C. Hymowitz, More Employees, Shareholders Demand that Sacrifices in Pay Begin at the Top, <i>Wall Street Journal</i>, p. B1, November 8, 1990. T. Kochan, R. McKersie, and P. Capelli, Strategic Choice and Industrial Relations Theory, <i>Industrial Relations, 23</i>, pp. 16-39, 1984. J. Kerr and R. Betis, Boards of Directors, Top Management Compensation and Shareholder Returns, <i>Academy of Management Journal, 30</i>, pp. 645-664, 1987.