![]() ![]() She regularly publishes news analysis past topics have included burnout among US workers, gender and racial dynamics within HR, and the hybrid workplace. Shana spearheads the HR Insider series, for which she's interviewed talent chiefs at Microsoft and Goldman Sachs, shared tips from an ex-Googler on knowing when to change jobs, and demystified the hiring process at Salesforce. In 2022, she published " Don't Call It Quits" to help professionals who feel stuck in their careers find greater happiness at work. Shana is a correspondent for Insider, where she covers career development and workplace culture. You need to provide people with information on what they can do to make more." “But what you need to do is make the system more transparent. “You don't have to disclose information for every single person in the company," she said. That lines up with what Elena Belogolovsky, who was an assistant professor of human resource studies at Cornell University, previously told me. Interestingly, the PayScale study also found that people feel more positive about work when their company communicates clearly about compensation - for example, by explaining to an employee why they're paid lower than market rate. Read more: 'They got a $2 million raise last year?': Netflix lets any exec or director see what employees make, and people are freaking out Case in point: Two-thirds of people who are being paid the market rate believe they are in fact underpaid. Meanwhile, a PayScale study, described in HBR, found that found most people have no clue whether they're paid fairly. ![]() Other research has looked at the effects of finding out coworkers' compensation.Ī 2011 study, for example, led by researchers at the University of California, Berkeley, and Princeton University found that employees who discover they're on the lower end of the salary range are more likely to start looking for new jobs. This study appears to be the first to test the effects of learning your manager's salary. We're inclined to feel worse about work after learning that we're paid less than coworkers On the other hand, employees who found out their peer was paid 10% more subsequently spent 9.4% fewer hours in the office, sent 4.3% fewer emails, and sold 7.3% less. It's as though learning how much your boss (or their boss) earns gives you something to aspire to. These numbers were even higher for employees who learned the salary of managers relatively close to them in the corporate pecking order. Results showed that employees who found out their manager was paid 10% more than they thought subsequently spent 1.5% more hours in the office, sent 1.3% more emails, and sold 1.1% more. In the year that followed, the researchers analyzed company data on when the employees clocked in and out of work, their email activity, and sales performance (and yes, it's kind of creepy that the company was tracking all this). Through an online survey, researchers asked employees to guess the salaries of their managers' salaries they offered rewards for accuracy.Ībout half the employees were then given the correct, higher number the other half were not given the correct number. The study took place at a large commercial bank in Asia, and involved about 2,000 employees at all levels of the organization. But when they found out that a coworker in a similar role earned more, they were inclined to start slacking off. My colleague Rachel Premack recently reported on a study that found many people are willing to pay to prevent the horror of having coworkers from finding out how much they earn.Īn earlier study by the same researchers -Zoë Cullen from Harvard Business School and Ricardo Perez-Truglia from the Anderson School of Management at the University of California, Los Angeles - yielded similarly fascinating findings.Īccording to their working paper, summarized recently in the Harvard Business Review, most people significantly underestimate how much their boss earns - and when they're given the correct number, they're inclined to work harder.Īs for peers' salaries, people were as likely to overestimate as they were to underestimate. Previous research suggests that most people have no idea whether they're paid fairly - and that clarity around why certain people are compensated more than others is related to higher job satisfaction.On the other hand, according to the study, learning your manager earns more than you thought can motivate you to work harder.A pay transparency study found that learning your coworkers earn more than you thought can be demotivating.Account icon An icon in the shape of a person's head and shoulders. ![]()
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