Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


University economics team studying workers’ comparing wages

University of Canterbury economics team studying workers’ comparing wages

August 31, 2014

A University of Canterbury economics research team is looking at fairness of the job assignments and whether workers are sensitive to the wages of their co-workers.

The research team, headed by Associate Professor Maro¹ Servátka, is investigating if workers react to the employers’ decisions about job allocations and if employers consider the importance of the job assignment process and reduce wage differences.

``It has been shown that workers choose not to produce their full effort when wages are intentionally low but they work harder when external processes determine their wages,’’ Associate Professor Servátka says.

The research has implications for firms’ wage policy decisions about wage secrecy and offering similar wages in order to avoid diminished performance of a company or organisation.

The project is being conducted at the university’s New Zealand Experimental Economics Laboratory.

A total of 288 students participated in the study, 96 of them were in a role of an employer and 192 in a role of a worker.

The research team analysed their actual decisions in a simulated labour market. All participants were financially motivated. The more profit they made in the market, the more cash they got paid for their participation in the experiment. This way the researchers saw how people realistically behave when facing various fairness scenarios, making their results of interest to existing real world employers.

Postgraduate student Katarina Danková says people are driven by social comparison and workers look at their co-workers who are in similar circumstances to evaluate their outcomes and judge whether they have been treated fairly.

``Workers often compare their wages within their own firm. Social comparisons may affect a worker’s attitude toward an employer or a firm, and thus in turn affect their performance. If workers feel that the employer is discriminating, they can withhold all their effort which can lead to a lack of cooperation and lower output for the firm,’’ Danková says.

``Firms often pay workers the same wage for a given job, regardless of workers’ productivity levels. If workers are paid below what they think they deserve, which depends on their co-workers’ wages, they might retaliate by reducing their performance.

``Understanding the impacts of reducing wages is important for employers since it can be profit maximising for firms to pay workers similar wages.’’


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines



Relevant Consents Gained: Government Unveils RMA Reform Package

The government has formally hauled down the flag on its attempts to alter the balance of environmental and economic priorities in the Resource Management Act, unveiling a 180-page Resource Legislation Amendment Bill containing reforms that have been largely endorsed by most political parties. More>>


Closing Schools And Such: Interim Redcliffs Decision Announced

“While the school’s board has argued that circumstances that could give rise to potential disruption are extremely unlikely, advice from technical experts has shown these concerns cannot be ruled out." More>>


Jane Kelsey: High Court Can’t Make Groser Provide TPPA Information Faster

‘This week we went back to court to challenge Trade Minister Groser’s stalling tactics over the release of information on the Trans-Pacific Partnership Agreement negotiations, following a High Court order that he reconsider the Official Information Act request I made last January’, said University of Auckland law professor Jane Kelsey, first applicant in the case. More>>

Werewolf 58: No Climate For Change

The last time the global community tried to take collective action on climate change the world’s leaders finally came to agree that every not-too-onerous effort should be made to hold global warming to 2°C above the pre-industrial average. At Paris, all 150 participant countries nations will have put forward their pledges... On the information available, New Zealand's is the second weakest contribution of any nation in the developed world. More>>


Lambton Quay Shutdown: Object Was Made To Look Like Bomb

Police cordoned off part of Lambton Quay Wednesday afternoon, saying that a suspicious package had been found. Buildings were evacuated and buses were detoured. The army’s explosive ordnance disposal unit was brought to the Quay. More>>


Public Sector Still Shrinking: Record Low Number Of 'Backroom Bureaucrats'

Ongoing restraint in the public sector and a focus on better frontline services has seen a further reduction in the number of core Government employees, State Services Minister Paula Bennett says. More>>


Disobeying The Law: Police Censorship Of Crime Research “An Outrage”

The Green Party is calling on Police Minister Michael Woodhouse to ensure Police scrap controversial contracts that place onerous restrictions on academic researchers’ access to Police data, the Green Party says. More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news