Why workers rate vice chancellor salaries as they do: psychosocial safety climate, industrial relations, and worker wellbeing in Australian Universities

The growing disparity between CEO and worker salaries is a significant issue societally, including in Australian universities, where half of Vice-Chancellors (VCs) in 2023 earned over AUD $1 million, up to or over seven times the average lecturer salary. These pay practices have emerged alongside an erosion of democratic governance in universities with staff and student largely removed from university councils (aka boards). Yet evidence suggests a uniformly poor psychosocial safety climate (PSC) and high work stress across the university sector. By integrating insights from Equity, Effort-Reward Imbalance and PSC theories, we sought to investigate the perspective of workers, (1) whether management factors (psychosocial safety climate, IR policies, organizational change) influence their perceptions of their own and VC salary fairness and (2) how these factors relate to worker psychological health. Data from 922 university staff across 39 Australian universities revealed that 79.6% of respondents rated their VC as overpaid/extremely overpaid compared to 23.7% of their managers and 41% rated their own pay as underpaid/extremely underpaid. Across universities, the factors most strongly associated with VC overpayment ratings were poor psychosocial safety climate, high levels of organizational change (e.g., cost-cutting changes) and emotional exhaustion, rather than dissatisfaction with their own pay and other traditional IR issues (i.e., job security, own compensation fairness). For worker psychological health, management factors (particularly IR policies) and self-salary fairness were important. High VCs salaries are unjustified in the minds of staff especially amid unsafe and unsustainable working conditions. Restoring participatory governance and linking VC salaries to psychosocial safety climate, IR policies, staff wellbeing and organizational stability are crucial to realign the values of universities with community expectations of public universities.