The pay gap between those in leadership positions and other organisational members has risen
markedly over the last five decades. There is evidence that this gap may undermine subordinate
identification with and evaluation of the organisation and its leaders. To date, however, there is
limited evidence that this gap affects related ...
The pay gap between those in leadership positions and other organisational members has risen
markedly over the last five decades. There is evidence that this gap may undermine subordinate
identification with and evaluation of the organisation and its leaders. To date, however, there is
limited evidence that this gap affects related subordinate behaviour, including their willingness to
follow their leader’s commands and work for the organisational public good. To address this, we
ran two pre-registered experiments (Study 1: N = 318; Study 2: N = 327) that examined
participants’ real effort behaviour in temporary ‘organisations’ with a small or large leader-worker pay gap. We varied whether this pay gap was exogenously determined (Study 1), or
endogenously chosen by the leader (Study 2). In both studies, workers in large (versus small) pay
gap organisations were less likely to identify with their leader and organisation and reported
poorer affective well-being. They were also less willing, at least initially, to follow their leader’s
commands. When the size of the pay gap was endogenously chosen by the leader, workers in
large (versus small) gap organisations reduced their contributions to the public good. We discuss
implications for organisational leadership and performance.
