How Much Does Your Boss Make? The Effects of Salary Comparisons

This study of a lot more than two,000 workforce in a multibillion dollar business explores how perceptions about peers’ and managers’ salaries affect employee behaviors and preferences for fairness. Staff members exhibit a substantial tolerance for inequality when task titles differ, which can make clear why incentives are granted as a result of promotions, and gender pay out discrepancies are most pronounced throughout positions.


We review how staff members understand the salaries of their friends and administrators and how their beliefs about These salaries affect their own actions. We done a industry experiment having a sample of two,060 staff members from a multibillion dollar Company. We combine prosperous information from surveys and administrative documents with details with the experiment, which delivered some workforce with correct information about the salaries of others. First, we doc massive misperceptions about salaries and discover some of their sources. Second, we find that perceived peer and manager salaries have a big causal effect on worker conduct. These effects are distinctive for horizontal and vertical comparisons. Although higher perceived peer wage decreases work, output, and retention, larger perceived supervisor salary includes a optimistic impact on those same results. We offer suggestive proof for your fundamental mechanisms. We conclude by discussing implications for shell out inequality and spend transparency.

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