Pay Secrecy and effort provisionNo 2012-13, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham Abstract: Pay secrecy is often justified on the ground of concerns about the detrimental consequences of intra-firm pay comparisons for work morale and performance. Surprisingly, however, there isonly limited empirical evidence that the availability of pay comparison information is detrimental for effort provision. In this paper we study pay comparison effects in a gift-exchange game laboratory experiment where an employer is matched with two symmetric employees. We compare effort choices made by employees in a ‘pay secrecy’ treatment and in two ‘public wages’ treatments where employees are informed of the wage paid to the coworker. In one ‘public wages’ treatments the employer can choose both wages she pays to the employees, while in the other treatment the wage paid to one employee is regulated exogenously. We show that pay disclosure can be detrimental for effort provision if employees are treated unequally. Keywords: pay secrecy; pay comparisons; wage inequality; gift-exchange; experiment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:not:notcdx:2012-13 Access Statistics for this paper More papers in Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC. |
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