WAGETRANS · Wage transparency in companies
Horizon 2020 — Marie Skłodowska-Curie Actions
- Duration
- 2017-10-01 → 2019-09-30
- EU contribution
- €177,599
- Participants
- 1
- Scheme
- MSCA-IF-EF-ST
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Results in brief
Wage transparency in companies
Enabling employees to assess their wages relative to their colleagues is at the heart of the current policy debate about discriminatory remuneration practices. With the goal to improve the bargaining position of female workers and to mitigate gender-based wage discrimination, the European Commission explicitly recommends to implement policies targeted at higher wage transparency, and several member states have recently introduced laws in line with this goal. In the light of these policy changes, the overall objective of this project was to significantly enhance the understanding of the role of wage transparency for the interaction between employers and employees with the help of controlled economic laboratory experiments. In companies, there is typically little data about the process of negotiations and outcomes of wage negotiations can be the result of many factors that cannot be observed and isolated in field data. Hence, laboratory experiments provide a useful tool to study behavioral reactions of employers and employees to wage transparency. As part of this fellowship, two subprojects have been conducted that focus on the question how employers and employees manipulate and respond to information about wages in the company environment.
Data: CORDIS, © European Union
Project objective
How much information about the wage structure should a company provide to its employees? Existing research in economics does not provide clear recommendations in this respect. Transparent information about the wages within a company may have a positive impact on employee satisfaction and motivation, because wage secrecy creates distrust and favours discriminatory practices. Yet, it is unclear whether the benefits of wage transparency are larger than the potential harm: Unequal wage profiles, if made transparent, trigger social comparisons among employees that may destroy work motivation and increase the likelihood of leaving the firm.So far, there is little systematic research on the impact of wage transparency as an element for incentive system design. The goal of this project is to significantly enhance the understanding of the role of wage transparency in two work packages that focus on the question how employers and employees manipulate and respond to the wage information in the company environment. In work package 1 (NEGOTIATION), I will analyse how transparency affects the wage negotiation process between employers and employees, the resulting wage profiles and subsequent working performance. In work package 2 (NORMS), I will study how the prevailing social norm within the firm changes the impact of transparency on the wage structure and working motivation. My project contributes to the emerging field of economic design, combining insights and methods from behavioural and experimental economics, social psychology and management research. The results from my project will yield important new insights for fundamental research, in particular concerning the emergence and importance of relative comparisons at the workplace and their interaction with social norms. Also, the results will have direct implications for incentive system design in practice and for policy measures against discriminatory remuneration practices in the EU and on the national level.
Original text from CORDIS.
Participants
- UNIVERSITEIT MAASTRICHT · MaastrichtCoordinatorNetherlands
Links
Data: CORDIS, © European Union