Detrimental Effect of the Characteristic-Human-Capital-Inputs-Based Horizontal Pay Dispersion on Team Member Work Role Performance via Employee Benign and Malicious Envy: An Evidence from China

PURPOSE: Pay for employee characteristic human capital inputs, which results in part of horizontal pay dispersion (HPD) and is well acknowledged by organizations and employees, has been greatly ignored by scholars. This study proposes “the characteristic-human-capital-inputs-based HPD” and explores what impact it tends to exert on team member work role performance (TMWRP), why, and when. Drawing on social comparison theory, goal-setting theory, and self-regulatory depletion theory, we develop a dual-mediation model elaborating the detrimental effect of this type of HPD on TMWRP from the perspective of employee benign and malicious envy and test it using objective and subjective data of 364 members coming from 65 Chinese ordinary employee teams. METHODS: We on-site collected objective data including each member’s pay level, outcome performance, and characteristic human capital inputs. Using five-point Likert rating method, team supervisors were requested to evaluate each member’s TMWRP and members were asked to self-rate benign and malicious envy. Hierarchical regression analysis, simple slope analysis, and bootstrapping approach were employed to verify the model. RESULTS: The characteristic-human-capital-inputs-based HPD adversely affects TMWRP by reducing employee benign envy (the mediating effect=−0.053, 95% CI=[−0.111, −0.002], excluding 0) and enhancing employee malicious envy (the mediating effect=−0.025, 95% CI=[−0.059, −0.004], excluding 0). The positive linkage between employee benign envy and TMWRP is only observed in lower-paid employees (the simple slope=0.145, p<0.05). Employee pay level does not moderate the relationship between malicious envy and TMWRP (β=−0.033, p>0.10). CONCLUSION: The characteristic-human-capital-inputs-based HPD, which involves the HPD part mainly resulting from employee differences in characteristic human capital inputs, tends to impair TMWRP through inhibiting employee benign envy and promoting employee malicious envy. Employee pay level is an important boundary condition constraining the positive effect of benign envy on TMWRP.