Author: Matthew Davis / Source: Big Think
- The debate on whether to be transparent about our salaries has been going on for decades.
- New research shows that depending on whether we share our salaries vertically (from boss to employee) or horizontally (between equal peers), we can expect different effects in our productivity and motivation.
- Millennials are more likely to share salary information than previous generations. What effect will this have on the workplace?
When we talk about our work, we talk about employee satisfaction, morale, engagement, a sense of being on a team, and a thousand other slightly vague variables that supposedly go into what makes a job good. All of this, however, feels slightly disingenuous. Office morale may indeed be an important part of having a good job, but the main thing that we work for is a weirdly taboo topic: money.
Some of you may even have registered the last sentence as somewhat shallow or materialistic, but the truth is that our reticence to discuss salaries in open terms with our employers and peers is the product of social conditioning. Somehow, it became dirty to think of one’s job in terms of the money one receives for doing it.
This tradition might be changing, however. A third of millennials have started to share their salary information with co-workers, which is four times as much as baby boomers report talking about their paychecks. Given this change, we have to ask: Is there a good reason why discussing salaries has been taboo for so long?
What happens when you learn your boss’s salary?
New research for the National Bureau of Economic Research took a look at what happens when we share our salaries with our coworkers. The research, conducted by Zoë Cullen and Ricardo Perez-Truglia, looked at 2,060 employees for a multi-billion-dollar bank in Asia.
The researchers sent each employee a survey asking them to guess at their managers’ salaries. Most of them didn’t do so well—the participants underestimated their managers’ salaries by 14%. Afterwards, the researchers randomly told half of the participants what their bosses’ actual salaries were, and then, thanks to some (somewhat concerning) monitoring by the bank, the researchers measured how much time the employees then spent in the office, how…
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