Jason Sandvik Featured in Harvard Business Review: Pay Transparency

Research conducted by Jason Sandvik, associate professor of finance, was featured in a recent Harvard Business Review article examining the effects of pay transparency in the workplace.

The article explored a common criticism of pay transparency—that revealing employee pay information will lead to dissatisfaction and lower morale. Sandvik and his co-authors found the opposite to be true: when companies disclose median employee pay alongside executive compensation, employees tend to become more satisfied with their own pay.

The researchers noted that employees often rely on incomplete or inaccurate information to form opinions about how their pay compares to others. Publicly sharing accurate figures allows employees to recalibrate their expectations, leading to a more favorable view of their own compensation.

Sandvik emphasized that the findings have important implications for organizations considering greater transparency. Rather than fearing a backlash, companies might see improved employee sentiment and trust.

“Pay transparency, when done well, can actually enhance morale,” he said, adding that the study’s results challenge long-held assumptions about the risks of disclosure.