When employees discover that colleagues doing similar work are paid more than they are it can destroy their job satisfaction and lead to psychological and physical illnesses, according to research co-led by the University of Brighton.
When staff feel ill-treated, they start doing less, they might stop saying hello to colleagues, pulling their weight with teamwork or putting in the unpaid extra hours they once did.
People in higher-paid top jobs feel the pain more but their employers also suffer because unhappy workers’ productivity is adversely affected.
Professor Andros Gregoriou, Head of the Economics and Finance Division of the University’s Business School, and colleagues from the Brunel University and the universities of Kent and Michigan, surveyed employees and found a connection between an employee’s pay satisfaction and the average pay of their colleagues doing similar work.
The research showed that when a colleague doing similar work is paid more than you then your job satisfaction levels drop and that can, in turn, adversely affect productivity, health and overall organisational performance.
Researchers called for employers to address the issue and for new Government regulation.
The study showed links between job satisfaction and performance, productivity, turnover, and absenteeism. These can have serious implications for human resources and can cost businesses dearly.
The study Pay referents and satisfaction with pay: Does occupational proximity matter? is published by the British Journal of Management.
Professor Andros Gregoriou joined Brighton Business School in April 2014, as the Head of the Economics and Finance Division of the Business School. Professor Gregoriou has held senior academic positions in various academic institutions throughout his career including the University of Hull, Brunel University and the University of East Anglia.
A leading authority in finance, he has published a significant number of research papers in internationally recognised journals and generated over £5 million in research funding. He is a regular consultant for the CFA and the London Stock Exchange.