THE IMPLICATIONS OF AN ACROSS-THE-BOARD SALARY INCREASE Timothy J. Keaveny and Robert E. Allen ° ° ° , . o H ° ° = ° ° ° ù ° ° ° . ° ° ~ ù = ~ ° * ° ° ~ m , , , , ° , m . ° , ° ~ H ù H , H , , m H ~ ~ ~ ° ° * J,o~mo,amm°.u H ° " ~ ~ = I I ~ ' ° m ° ° ° ' U H ~ ~ The implications of an across-the-board salary increase for selected outcomes are assessed. While such an approach to employee compensation is easily adminis- tered, the results of this analysis suggest that such an approach has some Iong-run costs. Those perceiving themselves as high performers and as putting forth greater effort felt undercompensated. Those with feelings of being undercompensated, relative to those feeling equitably compensated, anticipated a reduction in their job performance during the coming year, and perceived a deterioration in the associa- tion between performance and compensation. Differences in intentions to search for alternative ernployment are statistically significant. ~~~~~~~J~~~~~~~H~~~~H~~o~~~~~~®~~~~~~~~~*~~~~~~j~~~~~~~I~H~~~~~~~~~~°~~~~~e"~~~~=~~~m~~'~~~~m~ ù « H ° ' ù H . ° . ' H m . H ' ù ° ° H ,,,.°°°ù°,,~°~lm~u,.°~,ùm°~.mH°«°°,~°°,« H ° . ° ° H H H ° ° ' ~ H ' ' ~ ° ' ' H ~ ~ ~ " ° Literature in the area of human resources management stresses two out- comes: performance and job satisfaction. The former is important because of the implications for profits and the continued existence of the organization. Job satisfaction is an important outcome because of its desirability, per se, and its possible implications for continued membership in the organization and for the motivation to work. This paper investigates the implications of one approach to administering an organization's compensation system with d respect to these outcomes. The approach to salary administration studied is one in which raises are distributed evenly to all employees. One fabel for this even distribution of salary increases is an across-the- board increase. There are two variations to this approach: all employees can receive either an equal dollar amount increase and an equal percentage pay increase (Henderson, 1979). The equal dollar amount procedure implies a larger percentage pay increase for those at the low end of the salary scale relative to higher paid employees. The equal percentage pay approach implies a larger dollar amount increase for those receiving high salaries compared to TimothyJ. Keaveny and Robert E. Allen, Universityof Wyoming. Research in Higher Education © Agathon Press, Inc. Vol. 19, No. 1, 1983 11