Absence of conflict of interest.
The study’s objective was to examine the impact of organizational accountability and transparency policies on merit-based pay increases.
The study used an interrupted time series design to compare merit-based pay increases before and after the introduction of organizational accountability and transparency policies when determining employee pay increases. The author used two databases from a private company containing the pay and performance evaluation ratings for the study sample before and after the policies were introduced.
The study found no significant relationship between the organizational accountability and transparency policies and merit-pay increases.
The quality of causal evidence presented in this report is low. This means we are not confident that the estimated effects are attributable to organizational accountability and transparency policies; other factors are likely to have contributed.
Organizational Accountability and Transparency within Pay Decisions
Features of the Intervention
In recent years, organizational accountability and transparency policies have been recognized for their ability to decrease the likelihood of decision makers making gender/racial attributions in merit-based pay increase processes. In the workplace and academia, organizational commitments to equitable promotions (accountability) and provision of payment data (transparency) have been utilized to expose existing biases of decision makers. Following a list of recommended policies to increase equity amongst employee pay raises, a large private company adopted several policies in 2004 to increase organizational accountability and transparency in regard to merit-based pay decisions. Specifically, the company introduced a committee to monitor pay increase decisions and provided payment data to senior management/HR by performance level, gender, race, and foreign nationality to increase transparency.
Features of the Study
The study compared the outcomes of employees before and after the organizational accountability and transparency policies were implemented, with a focus on observing pay increase differences by employee demographics. To compare these outcomes, the author used data from 1996-2003 and 2005-2009 to analyze outcomes before and after the policies were implemented in 2004. The study sample was selected from employees in the employee database that were associated with their demographics, with 5,998 employees included before the policies were implemented and 6,115 employees following the intervention. To be included in the analysis, employees were also required to stay in the company for at least two years during the period under study. The majority of the study sample was female (65 percent), white (68 percent), and born in the United States (94 percent). Almost nineteen percent (18.8 percent) were African American, 9.5 percent were Asian American, 2.3 percent were Hispanic, and 5.5 percent were not born in the U.S.
Earnings and wages
The study did not find a significant relationship between implementation of the policies and differences in merit-based pay growth amongst female, African American, Asian American, Hispanic, and Non-U.S. born employees.
Considerations for Interpreting the Findings
The study used an interrupted time series design, comparing outcomes in the time period before the policy change with outcomes in the period following that change at one private company. To provide high or moderate causal evidence, studies using this design must include multiple demonstrations of the impact—for instance, by introducing and withdrawing the policy at different times and/or for different units of observation. This is necessary because this method does not involve an explicit comparison group—for example, a similar company that did not implement a policy change. Because the policy was implemented at one company in one year, multiple demonstrations of the effect are not possible. Therefore, it cannot receive a high or moderate causal evidence rating.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author examined only one demonstration of the intervention. This means we are not confident that the estimated effects are attributable to organizational accountability and transparency policies; other factors are likely to have contributed.