Pay Transparency and Productivity

43 Pages Posted: 31 Jan 2023

See all articles by Cédric Gutierrez

Cédric Gutierrez

Bocconi University - Department of Management and Technology

Tomasz Obloj

Indiana University - Kelley School of Business - Management & Entrepreneurship

Todd Zenger

University of Utah

Date Written: December 13, 2022

Abstract

Taking advantage of the staggered timing of shocks to the availability of wage information for US academics we show that, across a range of metrics, transparency causes no decrease and, in some cases, results in an increase in performance outcomes. However, productivity responses predictably vary based on what transparency reveals. At the individual level, we find that those inequitably overcompensated increase their effort, while those inequitably under-compensated decrease or do not change their effort. At the organizational level, we find that the productivity decreases when pay transparency reveals inequity. Our study provides one of the first field-based empirical investigations of the productivity consequences of wage transparency and points to the importance of delineating the effects driven by equity as opposed to equality of pay.

Keywords: pay transparency, equity, equality, productivity

Suggested Citation

Gutierrez, Cédric and Obloj, Tomasz and Zenger, Todd R., Pay Transparency and Productivity (December 13, 2022). Bocconi University Management Research Paper, Kelley School of Business Research Paper No. 2022-4341804, Available at SSRN: https://ssrn.com/abstract=4341804 or http://dx.doi.org/10.2139/ssrn.4341804

Cédric Gutierrez (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Tomasz Obloj

Indiana University - Kelley School of Business - Management & Entrepreneurship ( email )

Bloomington, IN 47405
United States

Todd R. Zenger

University of Utah ( email )

David Eccles School of Business
1655 East Campus Center Drive
Salt Lake City, UT 84112
United States
801 585-3981 (Phone)
801 581-7939 (Fax)

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