Setting adequate wages for workers: Managers' work experience, incentive scheme and gender matter

Area of Science:

• Behavioral economics
• Organizational psychology
• Sociology of work

Background:

• Growing salary disparities between managers and workers are a global concern.
• Lack of diversity in management positions is frequently observed.
• Understanding factors influencing wage decisions is crucial for workplace equity.

Purpose of the Study:

• To examine how managers' gender and incentive schemes affect worker wage decisions.
• To investigate the impact of task experience on managerial wage choices.
• To assess the potential of diversity to mitigate salary gaps.

Main Methods:

• Two experimental studies were conducted.
• Managerial participants were assigned different incentive schemes.
• Participants' decisions on worker wages were recorded and analyzed.

Main Results:

• Male managers exhibited more self-serving behavior under incentive schemes.
• Prior experience with worker tasks led to increased worker appreciation.
• Female managers showed more consistent wage decisions, less influenced by incentives.
• Incentive schemes that precluded self-orientation strengthened positive effects.

Conclusions:

• Female managers' consistent wage decisions suggest diversity can reduce salary inequality.
• Managerial experience with worker tasks promotes fairer wage setting.
• Increasing diversity in management may improve work atmosphere and reduce pay gaps.