The Motivating (and Demotivating) Effects of Learning Others’ Salaries

hbr.org

We saw that finding out peers get paid more does have a negative effect on the employee’s effort and performance. Finding out that peers earn on average 10% more than initially thought caused employees to spend 9.4% fewer hours in the office, send 4.3% fewer emails, and sell 7.3% less. This evidence suggests that it might not be wise to motivate individual employees through raises alone. If you increase the pay of one employee, that employee may work harder but the rest of the peer group could work less hard

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