Pfeffer Argues for Wage Compression and Symbolic Egalitarianism

In: Business and Management

Submitted By metebelis3
Words 1519
Pages 7
The goal of this essay is to discuss the importance of culture, the job, and organisational context in determining whether wage compression and symbolic egalitarianism are best. Pfeffer (2005) argues for wage compression and symbolic egalitarianism as two of thirteen management practices that lead to superior organisational performance, and the rationale and validity of his argument will be assessed in line with the work of Hofstede as applied to studies of multinational corporations. Pfeiffer’s arguments will be shown to be of limited application contingent on the context they are being applied to.

Symbolic egalitarianism is a conscious strategic decision within the organisation to remove symbols of hierarchy and the differential valuing of employees. This can include decisions such as moving managers from their offices to open plan areas, reducing or removing tiers of titular status, or status symbols attached to seniority or role. Pfeffer argues symbolic egalitarianism signals equality and improves communications, it “diminishes ‘us’ versus ‘them’ thinking” [ (Pfeffer, 2005, p. 101) ] which he believes creates a more collaborative environment with better information flow and cooperation due to the hierarchical barriers between employees and managers being removed.

Organisations make a strategic choice in their remuneration and reward programs to enforce either hierarchical or egalitarian culture. Egalitarian systems allow earnings to increase without employees having to move up to more senior roles. This allows for a more flexible workforce that can be moved across jobs without moving up tiers, allowing for greater responsiveness to “new areas, projects or positions” [ (Gomez-Mejia & Balkin, 1992, p. 46) ]. This system can, however, lessen the longevity of the employment relationship. Organisations with a more mature and stable place in their market…...

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