The Effect of Merit Pay on Pay Gaps

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Publication Type:

Journal Article - research, tables/charts

Language:

English

Major Subjects:

Discrimination, EmploymentSalaries and Fringe Benefits -- Trends -- United KingdomMinority Groups -- ClassificationWomen

Minor Subjects:

Human; Reward; Productivity -- Evaluation; Employee, Disabled; Ethnic Groups -- Classification; Employee Incentive Programs; Management Information Systems -- Utilization -- United Kingdom; United Kingdom; Prospective Studies; Retrospective Design; Job Accommodation; Descriptive Statistics; Chi Square Test; Regression; Benchmarking

Abstract:

This article concerns rates of wage growth among women and minority groups and their impact on pay gaps. Specifically, it focuses on the pay progression of people with more than one disadvantaged identity, and on the impact of merit pay. Recent research indicates that pay gaps for people in more than one disadvantaged identity category are wider than those with a single-disadvantaged identity. It is not known whether these gaps are closing, at what rate, and whether all groups are affected equally; nor is it known whether merit pay alleviates or exacerbates existing pay gaps. In addressing these issues, the analysis draws on longitudinal payroll data from a large UK-based organization. Results show that pay gaps are closing; however, the rate of convergence is slow relative to the size of existing pay disparities, and slowest of all for people with disabilities. When the effect of merit pay is isolated, it is found to have a small positive effect in reducing pay gaps, and this effect is generally larger for dual/multiple-disadvantaged groups. These findings run counter to the well-established critique of merit pay in relation to equality outcomes. The implications of this are discussed, and an agenda for research and practice is set out. © 2015 Wiley Periodicals, Inc.

Journal Subset:

Blind Peer Reviewed; Double Blind Peer Reviewed; Health Services Administration; Peer Reviewed; USA

ISSN:

0090-4848

MEDLINE Info:

NLM UID: 9877746

Entry Date:

20150320

Revision Date:

20150710

DOI:

http://dx.doi.org.tamuct.idm.oclc.org/10.1002/hrm.21692

Accession Number:

103777589

Database:

CINAHL Complete

Publisher Logo:

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