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Allocating resources fairly among group members: The medium of exchange matters

DeVoe, Sanford E.; Iyengar, Sheena Sethi

All organized groups face the fundamental problem of how to allocate resources fairly. Managers often confront this challenge when deciding whether to reward individual or team performance. Building upon recent research that demonstrates the unique norms invoked by the resource of money, we propose that what individuals' judge to be a fair allocation principle among group members systematically varies as a function of whether the resource being distributed is money versus other resources that are allocated within organizations. We review prior research examining contextual variables influencing allocation preferences and attempt to identify the different characteristics of money as a resource that might influence conceptions of fairness. In light of the existing research, we argue that an egalitarian allocation principle will be understood to be less fair when the norms of the market are invoked by the distribution of a resource that is a medium of exchange (e.g., money) rather than an in-kind good (e.g. food). We conclude by discussing the implications of identifying the unique properties of money for a wide set of literatures. This novel perspective on the role the allocation medium plays in how groups allocate resources fairly will be of interest to scholars of justice.

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More About This Work

Academic Units
Business
Published Here
February 22, 2010

Notes

Research on Managing Groups and Teams, vol. 13, Fairness and Groups (2010).

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