{"id":3913,"date":"2025-04-04T16:29:29","date_gmt":"2025-04-04T16:29:29","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=3913"},"modified":"2025-07-09T15:19:35","modified_gmt":"2025-07-09T15:19:35","slug":"pay-transparency-boosts-performance-retention-of-top-performers","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/pay-transparency-boosts-performance-retention-of-top-performers\/","title":{"rendered":"Pay Transparency Boosts Performance, Retention of Top Performers"},"content":{"rendered":"

By Daniel Butcher<\/a><\/p>\n

Pay transparency laws can motivate star employee stay with companies and boost their performance, while spurring poor-performing working to quit.<\/p>\n

Academy of Management Scholar Peter Bamberger<\/a> of Tel Aviv University has conducted extensive research on pay transparency, including experiments to study the implications of pay transparency and secrecy on turnover.<\/p>\n

\u201cWe found that pay transparency generated higher retention for higher performers, but other studies done by economists found that transparency is associated with higher rates of turnover, in other words, lower retention\u2014so we have a disconnect there,\u201d Bamberger said.<\/p>\n

\u201cBut there are some indications that the turnover was higher among low performers, whereas, among high performers, that transparency didn\u2019t generate a higher rate of turnover; in those studies, transparency may not have generated higher retention, like we found, but most of the turnover that those researchers found in their field study was with lower performers,\u201d he said.<\/p>\n

In other words, it\u2019s a win-win situation for leaders and managers: Greater compensation transparency does not tend to encourage high-performing (and presumably well-paid) employees to leave the organization, while it does give a nudge to low-performing (and presumably modestly paid) employees to seek employment elsewhere.<\/p>\n

\u201cWhen workers don\u2019t know what their colleagues are making, natural biases cause many to underestimate what we call \u2018instrumentality perceptions,\u2019 the instrumental role of extra effort to achieve the right incentive benefits in driving returns,\u201d Bamberger said. \u201cTheir motivation is lower when pay is secret, and the result is, over time, a lower growth curve in performance.<\/p>\n

\u201cThe slope of improvement is flatter when workers don\u2019t know how much money colleagues earn than it is when pay is transparent and they can see how they\u2019re doing relative to others,\u201d he said.<\/p>\n

The main takeaway is that pay transparency boosts performance and retention of top performers while leading to turnover of poor and middling performers.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Daniel Butcher Pay transparency laws can motivate star employee stay with companies and boost their performance, while spurring poor-performing working to quit. Academy of Management Scholar Peter Bamberger of Tel Aviv University has conducted extensive research on pay transparency, including experiments to study the implications of pay transparency and secrecy on turnover. \u201cWe found […]<\/p>\n","protected":false},"author":4,"featured_media":4635,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[20,44,77,76],"tags":[],"sp_smart_badges":[],"ppma_author":[70],"class_list":["post-3913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-careers","category-motivation","category-pay","category-performance"],"acf":[],"yoast_head":"\nPay Transparency Boosts Performance, Retention of Top Performers - Academy of Management Today<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aom.org\/today\/pay-transparency-boosts-performance-retention-of-top-performers\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Daniel Butcher\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/\"},\"author\":{\"name\":\"Daniel Butcher\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/#\\\/schema\\\/person\\\/d1297a59039d9ca7bac9d9f0952e508c\"},\"headline\":\"Pay Transparency Boosts Performance, Retention of Top Performers\",\"datePublished\":\"2025-04-04T16:29:29+00:00\",\"dateModified\":\"2025-07-09T15:19:35+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/\"},\"wordCount\":323,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.aom.org\\\/today\\\/wp-content\\\/uploads\\\/2025\\\/04\\\/sidewalk-star.jpg\",\"articleSection\":[\"CAREERS\",\"MOTIVATION\",\"PAY\",\"PERFORMANCE\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/\",\"url\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-boosts-performance-retention-of-top-performers\\\/\",\"name\":\"Pay Transparency Boosts Performance, Retention of Top Performers - 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You can reach him at dbutcher@aom.org or via LinkedIn.","sameAs":["https:\/\/aomtodayprod.wpenginepowered.com","https:\/\/www.linkedin.com\/in\/danielbutcher\/"],"url":"https:\/\/www.aom.org\/today\/author\/daniel-butcher\/"}]}},"authors":[{"term_id":70,"user_id":4,"is_guest":0,"slug":"daniel-butcher","display_name":"Daniel Butcher","avatar_url":{"url":"https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/01\/DanButcher_Academy-of-Management.webp","url2x":"https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/01\/DanButcher_Academy-of-Management.webp"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"rttpg_featured_image_url":{"full":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star.jpg",1000,640,false],"landscape":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star.jpg",1000,640,false],"portraits":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star.jpg",1000,640,false],"thumbnail":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star-150x150.jpg",150,150,true],"medium":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star-300x192.jpg",300,192,true],"large":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star.jpg",800,512,false],"1536x1536":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star.jpg",1000,640,false],"2048x2048":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star.jpg",1000,640,false],"owl_elementor_thumbnail":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star-600x384.jpg",600,384,true],"owl_elementor_team":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star-350x450.jpg",350,450,true],"owl_elementor_testimonial":["https:\/\/www.aom.org\/today\/wp-content\/uploads\/2025\/04\/sidewalk-star-100x100.jpg",100,100,true]},"rttpg_author":{"display_name":"Daniel Butcher","author_link":"https:\/\/www.aom.org\/today\/author\/daniel-butcher\/"},"rttpg_comment":1,"rttpg_category":"<a href=\"https:\/\/www.aom.org\/today\/category\/careers\/\" rel=\"category tag\">CAREERS<\/a> <a href=\"https:\/\/www.aom.org\/today\/category\/motivation\/\" rel=\"category tag\">MOTIVATION<\/a> <a href=\"https:\/\/www.aom.org\/today\/category\/pay\/\" rel=\"category tag\">PAY<\/a> <a href=\"https:\/\/www.aom.org\/today\/category\/performance\/\" rel=\"category tag\">PERFORMANCE<\/a>","rttpg_excerpt":"By Daniel Butcher Pay transparency laws can motivate star employee stay with companies and boost their performance, while spurring poor-performing working to quit. Academy of Management Scholar Peter Bamberger of Tel Aviv University has conducted extensive research on pay transparency, including experiments to study the implications of pay transparency and secrecy on turnover. \u201cWe found…","_links":{"self":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/3913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/comments?post=3913"}],"version-history":[{"count":0,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/3913\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media\/4635"}],"wp:attachment":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media?parent=3913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/categories?post=3913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/tags?post=3913"},{"taxonomy":"sp_smart_badges","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/sp_smart_badges?post=3913"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/ppma_author?post=3913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}