[Excerpt] Pay dispersion is a matter of organizational strategy. Research shows that large pay dispersion can motivate employees to perform better but also can hurt their motivation to collaborate with colleagues. Well-designed pay systems, such as pay for performance, may help mitigate these problems. But practice-level solutions have limitations, because employees often disagree with their performance ratings as evaluated by their supervisors or organizations. This study encourages HR professionals to focus more on employee characteristics, such as employees’ regulatory focus, to assure that large pay dispersions produce desirable organizational outcomes.