Abstract: | Drawing on equity and expectancy theories, we hypothesize that the perception of accountants about their ability to contribute relative to a peer (operationalized as the better‐than‐average BTA] bias) negatively influences their satisfaction with the outcomes of the performance evaluation process (operationalized as performance outcome satisfaction POS]). We hypothesize further that this negative influence is mitigated by the amount of relative performance pay. We test these hypotheses using data collected from a survey of and an experiment involving 164 entry‐level accountants. We found that in general our participants rated themselves better than the average audit professional and their immediate work associate; that is, they displayed a BTA bias. Moreover, we found that both the BTA bias and performance pay individually influenced POS; we also found a moderately significant interaction effect. In their entirety, the results indicate that the greater an entry‐level accountant believes that she or he is better than average the more likely her or his performance outcome satisfaction will fall. |