A new study suggests that disclosing employee performance rankings and peer compensation may unintentionally fuel pay demands among top performers — while discouraging lower-ranked employees from negotiating better wages.
Published in the Journal of Business Ethics, the research introduces the concept of “standard-based entitlement,” showing that workers’ salary expectations are shaped not just by how others are paid, but by their proximity to meaningful benchmarks—such as the top rank in a performance review.
The findings raise ethical and practical questions for HR professionals and employers implementing pay transparency policies, particularly as legislative and cultural pressures drive greater openness around compensation.
Top performers feel more entitled – others withdraw
“Employees closer to the top of a ranking feel more entitled to higher compensation, especially when they know what others are earning,” said Boris Maciejovsky, lead author and professor at the University of California, Riverside.
The study included four experiments involving more than 800 participants, ranging from full-time professionals to recent graduates. It found a consistent pattern: individuals near the top of a performance distribution were more likely to request substantial raises, especially when aware that peers in similar positions had done the same.
Conversely, those ranked near the bottom were less likely to ask for more—even when their peers made aggressive salary requests.
This dynamic, the researchers argue, could reinforce existing inequities within organizations, particularly if compensation expectations are shaped more by relative standing than objective contributions.
Peer comparisons intensify salary demands
In one experiment, participants were told they ranked #3 out of 500 employees and that a similarly ranked colleague received a 20% raise. When asked what raise they would demand in a job negotiation, those ranked higher requested significantly more than lower-ranked peers given the same peer benchmark.
The researchers found that this effect intensified when high-ranked participants were told a peer had made a large salary request, suggesting that relative comparison—not just objective performance—is a powerful driver of compensation expectations.
“Peer requests act as benchmarks,” said Maciejovsky. “Especially near the top, they legitimize and amplify feelings of deservingness.”
Entitlement drives the relationship
The psychological mechanism behind these effects, the study found, is entitlement.
Participants who believed they ranked highly reported stronger feelings of deserving a raise—even when the ranking was fictitious or only subtly different from others. These feelings, in turn, predicted their compensation requests.
A final experiment showed that this sense of entitlement was stronger when participants were positioned just ahead of a peer, rather than just behind. Being narrowly in front in a ranking seemed to reinforce the belief that one deserved more.
Implications for HR and compensation strategy
The findings pose challenges for employers navigating increasing calls for pay transparency. While openness around pay has been shown to reduce discrimination and improve equity, this study indicates that the effects are not uniform across employee groups.
“Pay transparency can motivate, but it can also discourage,” said Maciejovsky. “Especially for employees who perceive themselves as underperforming or falling behind.”
For HR professionals, the study suggests a need for more nuanced approaches to disclosure. Rather than fully open systems, organizations may benefit from targeted strategies that consider how different employees respond to comparative information.
“Equity isn’t just about what’s fair on paper—it’s about what feels fair,” said Maciejovsky.
Designing ethical pay systems
The research also touches on broader ethical concerns. Ranking systems, the authors note, may unintentionally undermine cooperation and trust in the workplace, especially if tied too closely to pay. High-ranking employees may become less collaborative, while lower-ranked individuals may feel excluded or demoralized.
“Organizations must think carefully about how they present performance information,” said Maciejovsky. “Well-intentioned transparency efforts could backfire if they amplify entitlement at the top while silencing the rest.”
The study calls for HR leaders and senior management to weigh the psychological impact of ranking systems and to design compensation structures that balance fairness, motivation and morale across the entire workforce.
See the original research at https://link.springer.com/article/10.1007/s10551-025-05995-x
