People may feel guilty because they feel they don’t deserve the bonus

People may feel guilty because they feel they don’t deserve the bonus. Or they may feel undervalued because someone else did get one, and they perceive their inputs to be superior to the person that got the bonus.

There are limits to the balance of the scales of equity and employees can find excessive executive pay demotivating.

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Staff perceptions of inputs and outcomes of themselves and others may be incorrect, and perceptions need to be managed effectively.

An employee who believes he is over-compensated may increase his effort. However he may also adjust the values that he ascribes to his own personal inputs. It may be that he or she internalizes a sense of superiority and actually decrease his efforts.

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