Pay Raise Determination Study

Thank you to those who participated in our pay raise study. We are interested in how the framing of a pay raise budget influences manager pay determinations and resulting pay disparity. To reliably study the framing effects, we needed to withhold this aspect of the purpose at the beginning of the study to avoid biasing responses of participants. We are explaining it now so that you are fully aware of the purpose of the study and give you a chance to ask further questions.

Participants in the study were asked to take the role of a manager at a hypothetical company and determine pay raises for a department with four hypothetical employees. Participants were randomly assigned to view a pay raise budget that was either given in proportional terms (percentage) or given in absolute terms (dollars). Additionally, for some participants the initial employee salaries were all the same, and for others they varied between employees. In the conditions where the salaries varied between employees, we included a gender wage gap to demonstrate how budget framing could exacerbate unjustified inequities, independent of individual bias.

We find in a laboratory experiment that the percentage frame perpetuates existing gender pay disparities more than the dollar frame. Supplemental analyses suggest that this difference is driven by anchoring. We also explore a salary frame condition that focuses managers’ attention on setting salaries rather than incremental raises. Similar to the dollar frame, the salary frame leads to a reduction in the gender pay gap relative to the percentage frame.

Your involvement is extremely helpful in increasing our scientific understanding of how pay raise budget framing can impact subsequent disparities, whether equitable or inequitable. If you have any questions or would like more information about the project, please feel free to contact the researcher.

Warm regards,

Kristy Towry

Professor of Accounting

Goizueta Business School

Emory University

If you have any questions or concerns about your rights as a participant, please contact the Emory Institutional Review Board at 404-712-0720 or 877-503-9797 or irb@emory.edu, or feel free to reach out to the researchers at the following email: payraisedetermination@gmail.com