Why His Merit Raise Is Bigger Than Hers

Meritocratic pay systems, in which superior performers are supposed to receive higher raises and bonuses than mediocre workers, are standard in well-managed companies. Differentiated pay is thought to increase workers’ effort and boost retention of top employees. But such pay-for-performance systems may have an unrecognized downside. Research I codirected suggests that, paradoxically, managers in explicit […]