Knowing Your Boss’s Salary Can Make You Work Harder—or Slack Off

BlueSky Thinking Summary
Erika Deserranno has done work on the efficiencies of meritocratic promotion incentive systems in improving worker productivity in Sierra Leone's public health sector.
The experiment with community health workers, conducted by Deserranno, examined a new system that decided promotion based on performance and made the salary of supervisors known to the worker.
The results revealed that under meritocratic conditions, worker productivity increased considerably at the top due to an enhanced possibility of promotion.
In general, knowledge about supervisors' salaries in non-meritocratic settings usually led to demotivation and a fall in performance.
The results have broader implications: merit-based promotion does encourage output but inefficiencies in upward opportunities and salary transparency do negatively impact morale and productivity not just in India but globally, both in the public and private sectors.
Deserranno underlines through her work the need for fair promotion practices and open pay structures to help maintain workforce motivation and organizational effectiveness.
Promoting equal promotion opportunities becomes a driver for sustaining employee engagement and performance in a constantly changing work environment.