Pay inequality, pay secrecy, and effort
Subtitle: theory and evidence
By: Gary Charness, Peter Kuhn.
Contributors: Kuhn, Peter Joseph.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11786; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11786.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Wages.; Employee motivation.
Description: "We study worker and firm behavior in an efficiency-wage environment where co-workers' wages may potentially influence a worker's effort.  Theoretically, we show that an increase in workers' responsiveness to co-workers' wages should lead profit-maximizing firms to compress wages under quite general conditions.  Our laboratory experiments, on the other hand, show that --while workers' effort choices are highly sensitive to their own wages-- effort is not affected by co-workers' wages.  As a consequence, even though firms in our experiment tended to compress wages when wages became public information, this did not raise their profits.  Our experimental evidence therefore provides little support for the notion that inter-worker equity concerns can make wage compression, or wage secrecy, a profit-maximizing policy"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 12/13/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.