Magnets of Collaboration: When Salary Disparity is a Draw Rather Than a Drag for Teaming

Abstract

Salary differences within teams have been studied in relation to a range of operational conditions and outcomes; however, whether and how the formation of teams is influenced by salary disparity has not been closely examined. Through a set of three replicated and pre-registered studies, we show evidence that teaming decisions are influenced by salary disparities. Study 1 finds – contrary to extant theories – that people tend to choose co-workers who are relatively high paid; however, the tendency relies significantly upon an assumption that salary is positively associated with co-workers’ knowledge, skills, abilities, and experience (KSAE). In Study 2, we show that the prospect of teaming-up with higher-paid co-workers is associated with more favorable dispositions towards higher-paid co-workers, suggesting that organizations that foster collaboration enjoy greater flexibility with respect to their compensation structures. Study 3 indicates that people are more inclined to select a higher-paid co-worker when there will be generalizable skills; and, such decisions are mediated by the favorable dispositions expected of such a teammate. In contrast with frameworks that predict salary disparities should be a drag on teaming with higher-paid co-workers, we build new theory while identifying multiple conditions when people are more likely drawn to working with higher-paid co-workers.