Fat Cats and Followers: High Pay Inequality Erodes Follower Wellbeing, but not Productivity
Kim Peters (University of Exeter)
Pay disparities between those in leadership positions and other organisational members have risen markedly over the last five decades. However, little is known about the implications of such disparities for workers’ willingness to follow their leaders and work for their organisation. To address this, we ran a pre-registered experiment (N = 318) that had participants work for temporary organisations that were characterised by a high or low vertical pay gap. Unexpectedly, although workers in organisations with relatively unequal (versus equal) pay were less likely to identify with their leader and organisation and had poorer affective wellbeing, they were no less likely to enact their leader’s commands or work for the public good. A follow up experiment (N = 315) suggested that injunctive norms (which are unaffected by pay inequality) may instil in workers a sense of moral obligation to do a good job that bolsters their efforts in the face of vertical pay inequality.
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