{"id":5261,"date":"2025-05-22T13:36:19","date_gmt":"2025-05-22T13:36:19","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=5261"},"modified":"2025-07-17T14:08:09","modified_gmt":"2025-07-17T14:08:09","slug":"how-looming-stagflation-may-affect-pay","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/how-looming-stagflation-may-affect-pay\/","title":{"rendered":"How Looming Stagflation May Affect Pay"},"content":{"rendered":"

By Paul Friedman<\/a><\/p>\n

At a time when some forecasts predict continuing or worsening inflation or stagflation and possibly a recession, pay transparency adds to the pressure on organizations\u2019 decision-makers.<\/p>\n

Peter Bamberger<\/a> of Tel Aviv University, an Academy of Management scholar who published a book based on his research on pay transparency<\/a>, said managers will need to build systems of compensation that are more justifiable and understandable to employees.<\/p>\n

\u201cThe first step with pay transparency is not necessarily to disclose pay levels of one employee or another employee, but rather to disclose how pay is determined in the organization,\u201d Bamberger said. \u201cMost employees have no understanding whatsoever how their pay is determined in the organization and how other people\u2019s pay is determined in the organization.<\/p>\n

\u201cSimply understanding pay processes and procedures, all the evidence suggests, has beneficial effects for both employees and employers with very few, if any, side effects\u2014except that employers have to work harder to build these equitable and fair systems.\u201d<\/p>\n

Bamberger said pay transparency is always problematic for decision-makers.<\/p>\n

\u201cNo one wants their decisions to be transparent to other people\u2014transparency is great when we are the observers, but when we\u2019re the observed, it\u2019s a terrible thing,\u201d Bamberger said. \u201cIt comes with potentially unintended negative consequences, especially when you have to think about what happens when people see that they are paid less than other people.<\/p>\n

\u201cIt becomes problematic for the ones making the decisions, and it can be problematic for the organization,\u201d he said. \u201cSo there are complications with pay transparency; there\u2019s no question about it.\u201d<\/p>\n

Still, Bamberger said he believes that \u201csunshine is the best antiseptic,\u201d and pay transparency can produce surprising positive results.<\/p>\n

\u201cWhat the evidence shows is that most employees underestimate how much their superiors are making, and when you think about that, it generates a tendency of individuals to think that they\u2019ll do better by leaving their current organization,\u201d<\/p>\n

Bamberger said. \u201cThe grass is always greener; if I want a pay increase, I have to go outside, and that movement has costs to the current employer.<\/p>\n

\u201cSo there\u2019s merit, potentially, in letting people see what the potential income might be for moving up within the organization,\u201d he said.<\/p>\n

\u201cI think organizations that are forced to be more accountable and hence build more effective pay systems\u2014more explainable and justifiable pay systems\u2014ultimately enhance the quality of the human capital they can bring in and hold to enhance their competitiveness, which becomes really important in a period of stagflation.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

By Paul Friedman At a time when some forecasts predict continuing or worsening inflation or stagflation and possibly a recession, pay transparency adds to the pressure on organizations\u2019 decision-makers. Peter Bamberger of Tel Aviv University, an Academy of Management scholar who published a book based on his research on pay transparency, said managers will need […]<\/p>\n","protected":false},"author":14,"featured_media":7191,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[74,77,76,78],"tags":[],"sp_smart_badges":[],"ppma_author":[842],"class_list":["post-5261","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hr","category-pay","category-performance","category-policy"],"acf":[],"yoast_head":"\nHow Looming Stagflation May Affect Pay - 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\/how-looming-stagflation-may-affect-pay\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Paul Friedman\" \/>\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\\\/how-looming-stagflation-may-affect-pay\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/how-looming-stagflation-may-affect-pay\\\/\"},\"author\":{\"name\":\"Paul Friedman\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/#\\\/schema\\\/person\\\/c798773d2b2b451f04d76dea2233ddd1\"},\"headline\":\"How Looming Stagflation May Affect Pay\",\"datePublished\":\"2025-05-22T13:36:19+00:00\",\"dateModified\":\"2025-07-17T14:08:09+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/how-looming-stagflation-may-affect-pay\\\/\"},\"wordCount\":428,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/how-looming-stagflation-may-affect-pay\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.aom.org\\\/today\\\/wp-content\\\/uploads\\\/2025\\\/07\\\/US-dollar-banknote-coins-stacks-chart-graph-scaled.jpg\",\"articleSection\":[\"HR\",\"PAY\",\"PERFORMANCE\",\"POLICY\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.aom.org\\\/today\\\/how-looming-stagflation-may-affect-pay\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/how-looming-stagflation-may-affect-pay\\\/\",\"url\":\"https:\\\/\\\/www.aom.org\\\/today\\\/how-looming-stagflation-may-affect-pay\\\/\",\"name\":\"How Looming Stagflation May Affect Pay - 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Peter Bamberger of Tel Aviv University, an Academy of Management scholar who published a book based on his research on pay transparency, said managers will need…","_links":{"self":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/5261","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\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/comments?post=5261"}],"version-history":[{"count":0,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/5261\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media\/7191"}],"wp:attachment":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media?parent=5261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/categories?post=5261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/tags?post=5261"},{"taxonomy":"sp_smart_badges","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/sp_smart_badges?post=5261"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/ppma_author?post=5261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}