Does pay transparency hurt collaboration? Cornell research says no.

CORNELL UNIVERSITY MEDIA RELATIONS OFFICE

FOR RELEASE: September 23, 2024

Kaitlyn Serrao

607-882-1140

kms465@cornell.edu

Does pay transparency hurt collaboration? Cornell research says no.

ITHACA, N.Y. – New research from Cornell University finds pay transparency does not hurt collaboration. However, when it came to hiring, bosses preferred those with a lower pay history than themselves.

Since 2018, approximately half of U.S. states, including New York, have enacted or are considering pay transparency laws. Previous research has suggested that increasingly visible pay disparities could adversely affect collaborations among co-workers, particularly with higher-paid partners.

Not true, said Kevin Kniffin, assistant professor and co-author of the new study. His new studies found that people tended to favor higher-paid collaborators – but only when they thought that person had superior skills and could teach them something.

“There was some reason to expect that people might prefer to be higher-paid than their co-workers or teammates, but our research found the opposite to be true,” said Kniffin. Angus Hildreth, assistant professor of management and organizations, is a co-author of the work.

“Why do people seem to have a preference to work with teammates who are higher-paid?” Kniffin said. “Our studies show that the predominant explanation is that people anticipate that they’re going to learn from that co-worker and eventually benefit themselves.”

“It’s like, ‘OK, I’m willing to join a group or a collaboration and sacrifice a bit of my self-esteem, maybe my status, in order to potentially gain something that I can use in the future.’ That’s the lens I’ve been looking at it through,” said Hildreth.

Another study tested the theory in a different type of collaboration: hiring. Participants, all of whom had hiring experience, acted as prospective employers who could hire someone with either a higher salary history than theirs or a lower one. Most (71%) chose the candidate with the lower salary history, and that trend was even more pronounced (83%) when they learned the two candidates had the same skill sets.

“As teamwork and pay transparency are both continuing to trend upward across organizations,” Kniffin said, “our studies highlight some unexpected dynamics that people should be anticipating.”

For additional information, read this Cornell Chronicle story.

Cornell University has dedicated television and audio studios available for media interviews.

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