Why equal pay does not equal happy employees

By DAILY MAIL REPORTER
Updated:

Equal pay can cause resentment and low productivity in the workplace, a study has revealed.

The research found that hard-working members of staff resent staff who make less effort for the same money.

Economists say this creates low motivation and morale, causing dedicated employees to slacken their work rate to create what they see as fairer working conditions.

Unhappy employees

Equal pay can sometimes cause resentment and low productivity at work

This in turn can spell disaster for companies' productivity.

The findings, from the highly regarded Nottingham School of Economics, raise a question mark over the ideal of equal pay, which has governed the thinking of public sector employers and the courts since the 1990s.

The study asked almost 150 volunteers to play the roles of employers and employees. Each employer was given a fixed amount of money, assigned two workers and told to pay them according to their efforts.

In the first experiment the manager paid identical wages, regardless of effort. In the second he was allowed to set individual wages based on performance.

The study's co-author, Dr Johannes Abeler, found workers who were paid individually worked almost twice as hard as those who got the same pay.

But those who put in more work while remaining on the same pay as lazier colleagues subsequently slowed their work rate.

Dr Abeler, an expert in behavioural economics, added: 'Hard workers get discouraged under equal pay and reduce their effort levels to those of low-performing colleagues.

'But under individual pay the high performers keep working hard - and the low performers change their behaviour and get better.'

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