Partnering Up (and Down): Examining When and Why People Prefer Collaborating with Higher-Paid Peers (and Lower-Paid Subordinates)

Emerging trends towards greater pay transparency and more freedom in teaming decisions intersect to highlight a potential conflict. Extant research suggests that visible pay disparities should adversely affect collaborations, particularly with higher-paid partners, but we challenge this thesis and present three pre-registered studies demonstrating that visible salary disparities can positively affect collaboration with higher-paid peers in teaming decisions. In Studies 1 and 2, people chose to collaborate with higher- rather than lower-paid peers unless explicitly told that their potential collaborators’ knowledge, skills, abilities, and experience were similar, suggesting that pay was viewed as a signal for competence. In Study 3, the preference for working with higher-paid peers was replicated even when the decision-makers were familiar with their potential co-workers. In contrast to teaming decisions, in a fourth pre-registered study (Study 4) focused on hiring decisions, people were less likely to hire a candidate with a higher (versus lower) pay history for a subordinate position on their team. Taken together, the studies demonstrate that visible pay disparities affect collaboration and selection decisions but in different ways: people tend to show a bias in favor of higher-paid peers as collaboration partners while they show an aversion to hiring people with higher-pay histories as subordinates.