Pay diversity across work teams: doubly de-motivating influences?

• Published in: Journal of managerial psychology Vol. 20; no. 5; pp. 417 - 439
• Main Authors: Carr, Stuart C, Hodgson, Matthew R, Vent, Duncan H, Purcell, Ian P
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Group Publishing Limited 2005
• Subjects: Australia; Comparative studies; Diversity; Equity; Groups; Injustice; Motivation; Occupational psychology; Organizational behavior; Payments; Team work; Teams; Wage differential; Workplaces; Australia; Motivation (psychology); Remuneration; Australia; Group behaviour
• ISSN: 0268-3946; 1758-7778
• DOI: 10.1108/02683940510602969

Purpose - The purpose of this paper is to examine the impact of pay diversity between groups, for example, across competing workplace teams.Design methodology approach - In Study I, 60 future managers from Newcastle, Australia, were paid either $1 or $2 to work on an identical intrinsically motivating task, either on an individual basis or as members of pay-diverse groups. In Study II, with 84 future managers in Darwin, Australia, the $1 $2 group pay dichotomy was made more realistic, by positioning the pay either at the bottom ($1) or top ($2) rungs of a pay ladder, or embedding it within a wider pay scale ($1 at a first, and $2 at the second tertile).Findings - In Study I, between individually paid workers, both below- and above-average payment were linked to low intrinsic motivation, whereas between groups, those in the higher pay bracket remained more motivated compared to their lower-paid group counterparts. In Study II, when pay was polarised, intrinsic motivation was higher in the higher-paid compared to lower-paid groups; but when pay was embedded, this comparative advantage dissipated.Originality value - Taken together, Studies I and II suggest that pay diversity across groups will de-motivate both lower- and higher-paid groups, except perhaps when a group tops the pay ladder.