Pay Transparency in the Field: Envy-Inducing Social Comparisons May Reduce Job Satisfaction
ISBN
10.5465/AMBPP.2018.14338abstract
Type
conference paper
Date Issued
2018-08-14
Author(s)
Abstract
Following policy shifts and research results about positive effects on employee retention and performance, pay transparency is increasingly debated as a suitable managerial tool in performance management. However, laboratory research in management and economics has pointed to associated costs of transparency (i.e., the “dark side” of pay transparency), among them envy and decays in cooperation. Interestingly, empirical evidence from the field is largely missing in this debate. In the present research, we exploit a naturally occurring shift in the transparency policy of a mid-sized firm to investigate whether falling short of one’s expectations regarding relative pay (i.e., a reference point violation) influences experience of episodic envy and, subsequently, affects job satisfaction. We administered surveys before and after the firm introduced a transparency initiative to measure a transparency-induced update of prior beliefs. The results show an effect of reference point violation on job satisfaction through episodic envy, an effect driven by people who initially hold optimistic views regarding their own relative pay (i.e., those low in victim-sensitivity).
Language
English
HSG Classification
contribution to scientific community
Event Title
78th Annual Meeting of the Academy of Management
Event Location
Chicago, Illinois, USA
Event Date
August 10-14, 2018
Subject(s)
Division(s)
Eprints ID
262297
File(s)![Thumbnail Image]()
open.access
Name
2018_Pay transparency_PAPEREURAM_FINAL_NOTBLIND_AOM.pdf
Size
325.79 KB
Format
Adobe PDF
Checksum (MD5)
8dbe38e239aafc8354cef1f861479eb2