How Illegitimate Pay Inequality leads to worse performance via aggression and coworker devaluing

This set of studies examines whether and how pay illegitimate pay inequality might motivate workers to perform worse. In a field sample of leaders, we found that illegitimate pay inequality predicted workplace aggression (peer-rated), which then predicted worse job performance ratings (boss-rated). We then conducted a second study of actual work teams in a highly controlled laboratory context to gain greater insight into why illegitimate pay inequality might motivate workplace aggression and worse performance. In this second study, we found that the linkage between manipulated illegitimate pay inequality and workplace aggression (peer-rated) was the degree to which individuals valued the contributions of their coworkers. Specifically, individuals in the illegitimately unequal pay condition tended to devalue the contributions of their coworkers. This, in turn, led both the advantaged and disadvantaged workers to express more workplace aggression toward their teammates. Ultimately, this aggression reduced these individuals’ job performance (objectively measured). We discuss how our findings contribute to the pay inequality and workplace aggression literatures, and also consider how our findings help provide insight into solving the most pressing management “grand challenge” – reducing the harmful effects of workplace pay inequality.