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How equal pay pushes up productivity

pay-gap

Finding people in similar jobs are higher paid seriously shatters job satisfaction, wellbeing and productivity, with those in top jobs feeling the pain the most.

That’s the message from a study showing staff rate themselves against colleagues of the same rank, and firms that pay the same job differently shoot themselves in the foot.

BBC journalist Carrie Gracie, who quit as China editor, accusing it of breaking equality law, is a textbook case of what the research says happens workplace-wide.

“When you realise a colleague is higher paid than you, your job satisfaction levels drop, says Brunel University London’s Prof Mustafa Ozbilgin. “And that affects productivity, health and overall organisational performance.”

The organisational behaviour expert worked with specialists in workplace wellbeing, psychology and pay to analyse the effects of pay comparisons on UK workers and business.  

Carrie Gracie’s resignation last week backs their findings, which Prof Ozbilgin says shows it’s time for tougher government regulation and for employers to take responsibility.

“We are on the cusp of a culture change,” he said. “Without brave actions like Carrie’s, which take courage, there can’t be progress.”

High flyers like her, in more prestigious well-paid roles, feel most wronged when someone at a similar level earns more, researchers found. Men are less likely to be satisfied than women, married people less satisfied than singles, and people new to the job unhappier than people who’ve been there longer, the study showed.

Since researchers link job satisfaction to performance, productivity, turnover and absenteeism, secrecy and inequality surrounding pay brings strong implications for human resources. And with compensation payouts for lost bonuses and earnings running into millions, the cost to business can be vast.

“Job satisfaction can affect all aspects of wellbeing,” says Prof Ozbilgin. “It can trigger psychological disorders, physical symptoms and lead to what’s called exit behaviour, which happens a lot in the UK, where people are quick to shift jobs if they feel undervalued or unfairly criticised.”

When staff feel ill-treated, they start doing less, the report says. They might stop saying hello to colleagues, pulling their weight with teamwork or putting in the unpaid extra hours they once did.

As well as calling for tighter government controls, Prof Ozbilgin wants organisations to put equal numbers of women and minorities on remuneration panels.

“Unequal pay and lack of transparency are bad business. It damages individual and organisational wellbeing.”

Reported by:

Hayley Jarvis, Media Relations
+44 (0)1895 268176
hayley.jarvis@brunel.ac.uk