Belief Updating Realignment from Wage Transparency
RCTClinical Trial
Information frictions regarding managerial salary scales are widespread in public bureaucracies, leading frontline employees to systematically misestimate vertical pay progression and promotion rewards.
Picture this
Imagine workers at a company guessing what their boss earns, with two-thirds guessing completely wrong; explicitly sharing the true official wage schedule acts as a clear reference reset, collapsing wild guesses into accurate expectations across the workforce.
What the evidence says
Disclosing true supervisor pay reduced the mean absolute difference between perceived supervisor pay and actual salary from 35,320 SLL in the control group to 482 SLL in the treatment group (p < 0.001), where only 30% held accurate beliefs at baseline (37% underestimated, 33% overestimated).
- Who was studied
- N = 2,009 Community Health Workers across 372 Peripheral Health Units in Sierra Leone.
- How
- Randomized controlled information intervention cross-randomized across health units, measuring baseline and post-treatment wage perceptions via incentivized survey questions.
What to do
Publish transparent, easily accessible public sector wage bands to eliminate widespread employee misperceptions regarding supervisor compensation.
From the source
"Column 1 shows that the mean absolute difference between perceived PS pay and the truth is 482 SLL in Tpay=1 vs. 35,320 SLL in Tpay=0."
Promotions_and_Productivity_The_Role_of_Meritocracy_and_Pay_Progression.pdf