The Dark Side of Transparency: How and When Pay Administration Practices Affect Employee Helping

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Abstract

This study examines a long-standing contention of practitioners and scholars alike, namely that pay transparency may adversely affect employees’ tendency to offer assistance to coworkers. Drawing from research on social comparison, information vividness, and envy, we develop and test a moderated-mediation model positing that transparency adversely affects the amount of help individuals afford to peers who, based on pay for performance, are paid more than them. Testing our hypotheses in the context of a multiround simulation-based laboratory experiment, we find that this adverse effect of pay transparency on helping is largely explained by transparency’s positive association with episodic envy, but only when individual differences grounded in differential social value orientations, specifically those regarding individualism beliefs and prosocial motivation, are taken into consideration. Implications for theory and practice are discussed.

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