Developing Evidence-Based Alternatives to Dual Salary Systems

Abstract

Abstract. The United Nation's Sustainable Development Goal (SDG) 8.5 aims to “achieve equal pay for work of equal value” globally by 2030. This goal conflicts with a widespread and continuing practice of paying skilled workers from higher-income economies working in lower-income settings more than their host worker counterparts. This brief summarizes research that has found that dual salaries undermine host colleagues' sense of wage justice, work motivation, and team relations. At organizational levels, they fuel turnover, increase brain drain, and reduce mental well-being of workers. Higher ratios fuel a “double demotivation” – extending to international staff who overrate their own abilities and reduce their effort at work. International, multisector evidence shows conventional dual salaries to be neither compatible nor to align with the SDGs. Organizational options for meeting SDG 8.5 identified in civil society groups include reducing dual salary ratios and implementing single salary systems at a national level. We offer three macro policy frameworks (Project Fair's Principles and Standards of INGO Fair Reward, the UN Global Compact, and OECD Guidelines for Multinational Enterprises) that can serve to render salary systems more facilitative of the SDGs and the Decent Work Agenda.