Final answer:
My employer primarily used a compensation method consistent with industry standards, where wages and salaries comprised the bulk of compensation complemented by benefits. They also upheld an implicit contract during economic downturns, maintaining wages which boosted loyalty and trust among employees. Procedural justice played a critical role in shaping employee behavior and instilled a sense of fairness in the compensation process.
Step-by-step explanation:
In my personal experience, my employer implemented a compensation method that included both direct and indirect forms, aligning with the breakdown presented in Table 6.7 and Table 1. The majority of my total compensation came from an hourly wage (wages and salaries), which constituted approximately three-quarters of the overall compensation, while the remaining portion included health insurance, vacation pay, and other benefits. This structure is typical in private industry jobs where various factors such as experience, education, skill, and union membership influence compensation.
Emphasizing the importance of fairness in compensation, an experience that influenced my behavior was during a period of economic downturn when, following the idea of an implicit contract mentioned above, my employer maintained my wages instead of reducing them. This gesture acted as a form of reassurance and insurance, making me and other employees feel valued and thus more loyal and committed to the company during tough times. Indeed, a study by Greenberg (1993) supports this approach, having found that procedural justice, or providing extensive explanations for pay rates, can significantly influence employee behaviors such as theft or loyalty.
This compensation approach is a form of psychological contract which promises stability even in an uncertain economy, as it provides a sense of protection against pay cuts. With this strategy, employees are less likely to demand high wage increases during economically strong periods, allowing companies to manage financial resources more effectively while maintaining a contented workforce. In my case, the trust developed through this practice also discouraged any inclinations to participate in actions like workman's compensation fraud, reaffirming the value of transparency and procedural justice in the workplace.