Morale Effect of Pay Progression under Non-Meritocracy
RCTClinical Trial
Steep vertical salary gaps between frontline staff and supervisory management can either stimulate career incentives or demotivate lower-tier employees depending on whether promotion rules are perceived as fair and performance-based.
Picture this
Imagine a game with a massive prize structure where winners are picked through favoritism; discovering how large the supervisor's paycheck is makes non-favored players feel cheated and demotivated, whereas knowing the winner is selected strictly by highest score inspires players to work harder.
What the evidence says
Revealing steeper pay progression increased household visits by 23% (+1.809 visits; p = 0.006) under a meritocratic promotion regime, but decreased household visits by 27% (-1.952 visits; p = 0.006) under the status quo non-meritocratic regime.
- Who was studied
- N = 2,009 Community Health Workers (CHWs) earning 150,000 SLL/month and 372 Peer Supervisors earning 250,000 SLL/month across 372 Peripheral Health Units in Sierra Leone.
- How
- 2x2 Field Experiment cross-randomizing meritocratic promotion rules with an information treatment revealing the actual salary gap between frontline health workers and supervisors.
What to do
Pair any organizational transparency or increase in vertical pay progression with verified, meritocratic promotion mechanisms to avoid negative worker morale effects.
From the source
"In the new, more meritocratic regime, higher pay progression increases the number of visits by 1.809 (+23%), while it reduces the number of visits provided by 1.952 (-27%) in the old, less meritocratic regime."
Promotions_and_Productivity_The_Role_of_Meritocracy_and_Pay_Progression.pdf