The question that now fascinates Obloj is whether that change in the relationship between higher pay and achievement at work is a good or a bad thing.

On one hand, companies might argue, offering pay incentives is crucial to attract and retain talent, a practice which results in people being paid very differently from one another. An organization could lose “superstars” if it couldn’t offer them much more money than other employers, Obloj said.

On the flipside, there’s an argument to be made that paying people based on performance is itself discriminatory.

For example: Academics might be given a “bump” in pay for every journal article they publish, but if most journal editors are male, and the review process tends to give preference to articles by male authors, then the performance-related reward is already structurally more likely to go to men, he explained.

Add to this the fact that female academics tend to be paid less even at entry level, which the study authors also documented, and any performance-related pay raises will only exacerbate existing unfairness. The same could well be true for other groups that don’t have the structural support (be it child care, home help, or something else) to make work achievements at the same rate as more privileged colleagues.

Teamwork and productivity

Could there be other benefits to decoupling performance and pay? There really might be, Obloj suggested.

His and Zenger’s next piece of research is on collaboration, and early results suggest that in organizations where pay transparency is in place, collaborations tend to be deeper and more fruitful. Productivity, meanwhile, does not appear to drop overall at places with transparent pay.

“People start collaborating more in environments where wages are more similar, and there’s less social comparison both upward and downward, meaning less envy and compassion,” Obloj said.

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