Overreward

Overreward refers to a situation where an individual perceives that the compensation or benefits they receive for their work exceed the perceived fairness of the reward relative to their inputs, such as effort, skills, and time. This concept is rooted in equity theory, which posits that individuals evaluate their relationships and outcomes based on ratios of inputs and outputs compared to others. When an individual feels they are overrewarded, their output/input ratio is perceived to be higher than that of a comparison other.

The experience of overreward can lead to a variety of psychological and behavioral responses. Some individuals may experience feelings of guilt or unease, while others might feel a sense of entitlement or a desire to justify their higher reward by increasing their effort or output. In some instances, overreward can lead to decreased job satisfaction if the individual believes they are not truly deserving of the compensation. Conversely, it can also motivate increased performance as a way to align their perceived inputs with their received outputs, effectively reducing the feeling of being overrewarded.

The perception of overreward is subjective and depends on individual comparisons and their assessment of fairness. Factors influencing this perception include personal values, cultural norms, and the availability of information about others' rewards. Organizations often aim to strike a balance in compensation to maintain perceived equity and foster positive employee morale and productivity.