A new study of employees at three University of California campuses suggests that letting workers make rough in-house pay comparisons hurts morale over all, by causing unrest among those at the bottom while having little impact on those on top.
Once given a chance to compare their pay with the salaries of others in the same department or occupation, those who fell below the median became less satisfied with their jobs and more likely to be looking for work elsewhere. The closer they were to the bottom, the more unhappy with their jobs they were likely to become, the study found.
Those whose pay was above the median did not seem to be affected one way or the other by the knowledge of how they compared with others, the study found. In a paper summarizing the study, the researchers involved said such a finding challenged the idea that relative pay and job satisfaction always rise in tandem. Under that idea, people should be made happier with their jobs by learning that they earn more than most others do.
The finding that employees’ job satisfaction seemed unaffected by the knowledge that they earned more than most colleagues also challenges the idea that people would use information on peer salaries mainly to update their expectations of their future earnings, the paper says. If such had been the case, people who learned their earnings were above the median generally would have experienced a decline in their job satisfaction, because such a revelation would have given them reason to doubt their bargaining position or their prospects for advancement, the paper says.
The study was conducted by three professors of economics at the University of California at Berkeley—David Card, Enrico Moretti, and Emmanuel Saez—and by Alexandre Mas, a professor of economics and public affairs at Princeton University. The National Bureau of Economic Research on Monday published a working paper summarizing their findings on its Web site.
The researchers carried out the study by taking advantage of The Sacramento Bee’s March 2008 decision to publish a searchable database containing individual pay information for California state employees, including workers in the University of California and California State University systems. The researchers sent a substantial share of employees of the University of California at Los Angeles, the University of California at San Diego, and the University of California at Santa Cruz e-mails letting them know about the site with pay information, and subsequently sent surveys gauging job satisfaction to both employees who knew about the site and employees who had claimed in an earlier survey not to have any knowledge of it. Their analysis focused on the survey responses of about 6,400 university workers, 15 percent of whom were faculty members and 85 percent of whom were staff members.
The paper summarizing the study says its findings “indicate that employers have a strong incentive to impose pay secrecy rules.” It also notes, however, that forcing employers to disclose the salaries of all of their workers might have a long-term impact on the composition of their work force and how their wages are distributed.
