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Wage transparency in companies

Objective

How much information about the wage structure should a company provide to its employees? Existing research in economics does not provide clear recommendations in this respect. Transparent information about the wages within a company may have a positive impact on employee satisfaction and motivation, because wage secrecy creates distrust and favours discriminatory practices. Yet, it is unclear whether the benefits of wage transparency are larger than the potential harm: Unequal wage profiles, if made transparent, trigger social comparisons among employees that may destroy work motivation and increase the likelihood of leaving the firm.
So far, there is little systematic research on the impact of wage transparency as an element for incentive system design. The goal of this project is to significantly enhance the understanding of the role of wage transparency in two work packages that focus on the question how employers and employees manipulate and respond to the wage information in the company environment. In work package 1 (NEGOTIATION), I will analyse how transparency affects the wage negotiation process between employers and employees, the resulting wage profiles and subsequent working performance. In work package 2 (NORMS), I will study how the prevailing social norm within the firm changes the impact of transparency on the wage structure and working motivation.
My project contributes to the emerging field of economic design, combining insights and methods from behavioural and experimental economics, social psychology and management research. The results from my project will yield important new insights for fundamental research, in particular concerning the emergence and importance of relative comparisons at the workplace and their interaction with social norms. Also, the results will have direct implications for incentive system design in practice and for policy measures against discriminatory remuneration practices in the EU and on the national level.

Fields of science (EuroSciVoc)

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Programme(s)

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

MSCA-IF-EF-ST - Standard EF

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Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

(opens in new window) H2020-MSCA-IF-2016

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Coordinator

UNIVERSITEIT MAASTRICHT
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 177 598,80
Address
MINDERBROEDERSBERG 4
6200 MD Maastricht
Netherlands

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Region
Zuid-Nederland Limburg (NL) Zuid-Limburg
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 177 598,80
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