Unequal compensation leads to less motivation in the workplace, study finds

Photo (c) MachineHeadz - Getty Images

Experts say workers are likely to feel less valued when others are given greater rewards for the same responsibility

All consumers want to feel appreciated at work, and getting a little extra incentive can help boost morale and workplace performance. However, when some employees get more of an incentive than others, it could affect all employees’ motivation. 

This idea was the basis for a new study conducted by researchers from University College London, which found that inequalities in compensation can make consumers less motivated or willing to work. 

“Our findings may shed light on how psychological mechanisms, apart from structural barriers, can contribute to higher unemployment and lower university application rates of people from disadvantaged backgrounds,” said researcher Dr. Filip Gesairz. “It’s more difficult to motivate yourself to work hard if you know that other people will be more generously rewarded for the same effort.” 

How disparities affect motivation

To put this into practice, the researchers had over 800 participants complete a basic task for a monetary reward. The participants were told that reward values were chosen at random, though they also learned that other participants were given a higher reward for no particular reason. 

The researchers learned that many of the participants were turned off from completing the task after learning that others were making far more money than they were. Both motivation and general happiness dipped when participants knew they were being rewarded unfairly. 

The researchers also gave the participants the option of refusing to work, and the unfairness in pay was a large factor in many participants walking away from the task completely. These findings highlight the link between compensation and motivation while also shedding light on how committed consumers are to fairness in the workplace.

“Whether inequality will negatively affect those at the top in ‘the real world,’ outside the lab, remains to be studied,” said researcher Tali Sharot. “One thing to consider is that in our experiment, people were made aware that their position was randomly assigned. In the ‘real world’ people many times assume that their good fortune is justified by their talent and therefore inequality might not have a negative influence on the motivation and well-being of privileged individuals in those situations. This is an important question that we hope to answer in the future.” 

Take a Financial Relief Quiz. Get matched with an Authorized Partner.