As pay transparency becomes more common in workplaces, people are showing a preference for working alongside higher-paid colleagues but are more likely to hire subordinates with a lower pay history than their own.
This intriguing behavior was revealed in a study published in American Psychologist (citation below) and led by researchers Kevin Kniffin and Angus Hildreth from Cornell University.
Collaboration and Pay Perception
The study examined how pay differences influence collaboration. Kevin Kniffin, assistant professor at Cornell University, has been intrigued by how salary disparities affect people’s attitudes toward colleagues.
“I’ve long been interested in the ways in which slight — and not-so-slight — differences in salaries can generate strong reactions from people,” Kniffin said, explaining the motivation behind the research, according to EurekAlert!.
In a series of experiments, the researchers asked participants to choose whom they would prefer to work with based on hypothetical salary information.
In one experiment involving economics PhD students, nearly 65% of participants chose to work with a higher-paid colleague.
This trend continued in subsequent studies, with more than half of the participants consistently opting for higher-paid collaborators, believing they would benefit from their expertise.
“People seem to assume that higher pay is merited and reflects greater competence,” explained Angus Hildreth, assistant professor at Cornell University. “They expect to gain from collaborating with a higher-paid colleague.”
Interestingly, however, when participants were informed that both colleagues had similar knowledge, skills, and experience, the preference for higher-paid partners decreased.
This suggests that salary differences are often used as a proxy for perceived competence but may not hold when more concrete information about capabilities is available.
The Hiring Paradox
When it comes to hiring, however, the dynamic changes. The researchers found that when hiring subordinates, participants preferred candidates with a lower salary history than their own.
This finding emerged in a study where 71% of hiring professionals selected candidates with lower pay histories, even when the candidates had the same qualifications as higher-paid ones.
This may stem from a belief that salary should align with organizational rank, and hiring someone with a lower pay history preserves the status hierarchy.
“While some may think pay transparency could deter collaboration with higher-paid coworkers, we find the opposite,” said Kniffin, emphasizing that higher salaries might attract collaboration rather than hinder it, according to Cornell Chronicle.
Implications for the Workplace
As pay transparency becomes more widespread, especially in states like New York, where pay transparency laws have been enacted, the study sheds light on how salary information can shape workplace dynamics.
The researchers suggest that salary disparities may not necessarily provoke resentment among employees, as some have feared.
Instead, higher pay can act as a source of motivation, encouraging employees to pursue opportunities for learning and growth through collaboration.
This research challenges the assumption that people want to be the highest-paid member of their team. Instead, many are willing to put aside concerns about status for the opportunity to collaborate with someone they perceive as more knowledgeable or skilled.
In the future, it will be important to explore whether this strategy of “partnering up” truly benefits employees in the long run, and whether higher-paid workers are indeed more likely to share their expertise with colleagues.
For now, the study highlights how salary information is increasingly influencing workplace behavior, with some surprising outcomes.
Citation
Kniffin, K. M., & Hildreth, J. A. D. (2024). Partnering up (and down): Examining when and why people prefer collaborating with higher-paid peers (and lower-paid subordinates). American Psychologist. https://doi.org/10.1037/amp0001397