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| Source: Berkeley Economic Review |
What happens when we know that others are paid more than us? Does it affect our willingness to collaborate with them? What about hiring decisions? Are we more or less likely to hire someone who may earn more than us? Cornell Professors Kevin Kniffin and Angus Hildreth examined this question in a series of experimental studies. They found an interesting, but not surprising, dichotomy when it came to collaboration vs. hiring.
First, the scholars discovered that, "People chose to collaborate with higher- rather than lower-paid peers unless explicitly told that their potential collaborators’ knowledge, skills, abilities, and experience were similar, suggesting that pay was viewed as a signal for competence." On the other hand, they found that, "People were less likely to hire a candidate with a higher (versus lower) pay history for a subordinate position on their team."
This study has some very interesting practical implications with regard to the pay transparency movement. The collaboration finding seems quite positive, though one has to wonder whether it is appropriate for workers to always use pay as a sign of competence. In some organizations, we know that compensation and position is not at all a sign of strong capabilities! The hiring dynamic is perhaps more problematic. We would hope that people would hire the best talent, and that they would not feel threatened by someone who had excellent capabilities warranting high compensation. Naturally, though, people's emotions are affected by compensation differences. If it means that we don't hire the best people, then that would be very worrisome.
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This insight into pay transparency highlights important challenges in workplace dynamics, especially regarding competence and hiring. It’s thought-provoking—just like when students ask, can i pay someone to take my proctored exam—the focus should remain on true ability, not just perceived worth. Real merit must drive decisions for lasting success.
The blog post by Professor Michael Roberto highlights an important study conducted by Cornell Professors Kevin Kniffin and Angus Hildreth on the relationship between pay differences, collaboration, and hiring decisions. Their findings reveal an interesting tension: while people are generally more willing to collaborate with higher-paid colleagues—assuming that higher pay reflects greater competence—they are less likely to hire someone with a higher pay history into a subordinate role. This suggests that pay can act as both a positive signal of ability and a source of insecurity or resistance when it comes to team composition and leadership dynamics. Cars for sale
The implications of this research are highly relevant to current discussions about pay transparency in organizations. On the one hand, the tendency to prefer collaborating with higher-paid peers may encourage workers to seek out individuals they believe can elevate the quality of their work. However, using pay as a sole indicator of competence is problematic, since not all organizations tie compensation directly to skill or performance. In fact, many structural and organizational biases can distort pay scales, meaning that equating salary with ability could reinforce flawed assumptions.
The hiring findings raise an even more pressing concern. If individuals shy away from hiring more highly paid candidates due to feelings of threat or fear of being overshadowed, organizations risk missing out on the best available talent. This behavior could ultimately hinder innovation, growth, and competitiveness. For organizations striving to embrace pay transparency, the challenge lies in fostering a culture where compensation differences do not trigger insecurity but instead highlight opportunities to leverage the strongest capabilities within the team. Audi a3 price in Kenya
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