Th-OR-S31-1 - Opening The Book: Individual Pay Transparency And Pay Dispersion

Discrimination and equality in the workplace
Oral Presentation
Partie de:
jeudi 18 mai   11:30 AM à 11:45 AM (15 minutes)
Human resource management
Discrimination and equality in the workplace
Opening the Book: Individual Pay Transparency and Pay Dispersion
I. V. Ohlmer 1,*, A. Sasson 2
1 Leadership and Organizational Behaviour, 2Strategy, BI Norwegian Business School, Oslo, Norway
Content: Organizations play a pivotal role in shaping pay dispersion through compensation decisions. Firms have explored a variety of policies and compensation programs aiming at increasing equitable distribution of rewards. Evidence suggests that such policies have inherent shortcomings and that pay dispersion is rapidly increasing. In this paper, we explore pay transparency as an alternative intervention. We argue that information about individual pay can effectively trigger a self-regulating group mechanism of social comparison and control, creating intra-organizational compensation equity. We challenge the assumption that pay disclosure causes social conflicts and negative organizational outcomes. We argue for the opposite: Information about individual pay reduces unacceptable, unjustifiable salary dispersion, maintains dispersion when warranted, and increases organizational performance.
Design: We test our hypotheses by investigating a unique governmental intervention that made tax records of all Norwegian residents easily accessible through mass media. We apply an interrupted time-series design using a unique population-wide database that encompass all residents and all firms in the Norwegian economy in the years 2001-2012.
Results: We advance evidence that individual pay transparency significantly reduces pay dispersion. Our findings further suggests that pay transparency reduces unjustifiable pay dispersion, especially for discriminated groups.
Limitations: The cultural characteristics of Norway (i.e. low hierarchies and strive for equality) may not be generalizable across other countries.
Implications: Findings suggest individual or unit-level pay transparency as possible practice to reduce unjustifiable pay dispersion.
Value: The governmental intervention that made tax records of all residents of a country accessible through mass media is a unique and, to our knowledge, unexplored case, enabling generalizations about pay transparency across organizations and industries.

BI Norwegian Business School
PhD Student in Leadership and Organizational Behaviour

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