{"id":3921,"date":"2025-04-03T20:20:02","date_gmt":"2025-04-03T20:20:02","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=3921"},"modified":"2025-12-23T12:24:58","modified_gmt":"2025-12-23T12:24:58","slug":"pay-transparency-can-push-reward-inequities-under-the-table","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/pay-transparency-can-push-reward-inequities-under-the-table\/","title":{"rendered":"Pay Transparency Can Push Reward Inequities Under the Table"},"content":{"rendered":"

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

Performance-based pay\u2014including merit-based salary increases and bonuses\u2014can be complicated by pay transparency rules that make the details known to coworkers, according to Academy of Management Scholar Peter Bamberger<\/a> of Tel Aviv University.<\/p>\n

A reaction to that can lead to pay compression<\/strong>\u2014when wages for low-skilled or low-performing workers and wages for high-skilled or high-performing workers move closer together\u2014or an increase in requests for deals with special perks, also called idiosyncratic deals <\/strong>or i-deals<\/strong>. I-deals are non-standard work arrangements that individual employees negotiate to get remote work or flexibility, training opportunities, special assignments, and even performance benchmarks that would trigger bonuses. I-deals are often used to reward high-performing candidates and employees who have specialized skills in the hopes of retaining them long-term.<\/p>\n

\u201cYou can imagine, if you\u2019re a star performer and your bonus or merit-based raise is lower than it\u2019s been before, you\u2019re likely to think about leaving that organization and going to work somewhere else\u2014and that\u2019s exactly what some economists have found, that where we have pay compression, the star performers actually pick up and leave,\u201d Bamberger said. \u201cI recently published a paper that also shows the same thing, that pay compression very quickly leads to star performers\u2019 departure.\u201d<\/p>\n

So what can organizations\u2019 leaders do?<\/p>\n

\u201cWhat we find is that employees don\u2019t necessarily push for more money; they make their requests for other types of rewards, primarily benefits as part of what we call idiosyncratic deals, things like the number of days per week that they can work from home or the number of weeks per year that they can work from Hawaii,\u201d Bamberger said. \u201cThere\u2019s a large body of literature on i-deals in management, and they include various types of benefits packages.<\/p>\n

\u201cWhat we find using data from about 120 organizations in China is that where pay is more transparent, the differentials in the pay of higher and lower performers are more compressed,\u201d he said. \u201cPerhaps because such a situation could drive higher performers to look for alternative employment, when pay was more transparent, employers rewarded the higher performers in other, less observable ways using these idiosyncratic deals. If fact, higher performers asked for these types of deals, and in 50% of cases where they ask for it, they got it.<\/p>\n

\u201cWhat\u2019s actually happening is that transparency is shifting the pay differential from where it can be seen, annual raises and bonuses, to those types of rewards where it’s not transparent, that is, idiosyncratic deals.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

By Daniel Butcher Performance-based pay\u2014including merit-based salary increases and bonuses\u2014can be complicated by pay transparency rules that make the details known to coworkers, according to Academy of Management Scholar Peter Bamberger of Tel Aviv University. A reaction to that can lead to pay compression\u2014when wages for low-skilled or low-performing workers and wages for high-skilled or […]<\/p>\n","protected":false},"author":4,"featured_media":8208,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[20,74,77,78],"tags":[],"sp_smart_badges":[],"ppma_author":[70],"class_list":["post-3921","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-careers","category-hr","category-pay","category-policy"],"acf":[],"yoast_head":"\nPay Transparency Can Push Reward Inequities Under the Table - 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-can-push-reward-inequities-under-the-table\/\" \/>\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=\"3 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-can-push-reward-inequities-under-the-table\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-can-push-reward-inequities-under-the-table\\\/\"},\"author\":{\"name\":\"Daniel Butcher\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/#\\\/schema\\\/person\\\/d1297a59039d9ca7bac9d9f0952e508c\"},\"headline\":\"Pay Transparency Can Push Reward Inequities Under the Table\",\"datePublished\":\"2025-04-03T20:20:02+00:00\",\"dateModified\":\"2025-12-23T12:24:58+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-can-push-reward-inequities-under-the-table\\\/\"},\"wordCount\":428,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-can-push-reward-inequities-under-the-table\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.aom.org\\\/today\\\/wp-content\\\/uploads\\\/2025\\\/04\\\/bonus-bonuses-compensation_Resentful-employee-loser-looks-enviously-at-promoted-colleague-winner-enjoying-success-good-news-while-team-rivalry-unfair-competition.webp\",\"articleSection\":[\"CAREERS\",\"HR\",\"PAY\",\"POLICY\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-can-push-reward-inequities-under-the-table\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-can-push-reward-inequities-under-the-table\\\/\",\"url\":\"https:\\\/\\\/www.aom.org\\\/today\\\/pay-transparency-can-push-reward-inequities-under-the-table\\\/\",\"name\":\"Pay Transparency Can Push Reward Inequities Under the Table - 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