Why Retirees Change Their Alcohol Consumption

Three Types of Pay Transparency Are Changing the Game

By Daniel Butcher

While there isn’t a nationwide pay-transparency law in the United States—at least not yet—10 states, several cities, and even one county (Westchester, New York) have such regulations. That means organizations may need to adjust how they communicate about pay depending on where they’re based and where they operate.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said one type of transparency is letting employees freely talk about their pay with one another. That’s been protected by U.S. federal law since the passage of the National Labor Relations Act (NLRA) in 1935.

“Most employees don’t know that they have the right to talk about their pay with other employees—that’s part of the NLRA. Still, companies discourage it, and in fact, some companies go too far in discouraging it so that they’re actually breaking the law,” Bamberger said.

“There’s very little merit to stopping employee disclosure, particularly since we now have things like Glassdoor, which really make it easy for employees to find out what others are earning in return for disclosing their own compensation,” he said.

In the second type of pay transparency, employers disclose compensation ranges to current and prospective employees.

“Laws in more than a dozen U.S. states and several cities are pushing for some degree of partial transparency with mandatory employer disclosure of pay ranges,” Bamberger said.“Going beyond that, where it’s not ranges that employers show, but rather actual individual rates of pay, can be potentially risky.

“Our studies have found that letting employees see how much coworkers make tends to have some pretty detrimental effects, whether it comes to malicious envy or even counterproductive work behavior,” he said. “The comp ranges not so much, but revealing detail about how much specific individuals are making can be problematic, so you have to be very careful about how you go about doing it.

“There are some success stories that I’ve written about in a book that I wrote about pay transparency, but it can be problematic.”

The third type is procedural pay transparency, from which Bamberger and his research colleagues have found only positive outcomes.

“That is being open and transparent about every aspect of the pay system in your organization, telling employees about the basis of the compensation structure, for example, what are the criteria for increasing bonuses? How were bonuses calculated this past year? How are differential pay rates by levels in the organization determined?” Bamberger said.

“Most employees don’t have a clue as to what their benefits are or how compensation levels are determined in the organization—employee pay knowledge is really minimal,” he said.

“Where organizations enhance this procedural pay transparency, perceptions of justice and fairness increased dramatically, and that has a wide range of beneficial effects and implications on retention, social exchange and reciprocity among coworkers, and giving back to the organization.”

Why You Should Be Kind to Medical Staff

By Daniel Butcher

While many people worldwide experience frustration with their healthcare system, taking it out on individual healthcare workers can backfire. Rudeness toward medical staff can lead to more delays and even errors.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that being rude to doctors, nurses, and other medical staff can hurt their job performance because it consumes valuable cognitive resources. In short, rudeness creates a huge mental distraction.

“Our theory was that when you experience rudeness, you’re distracted because of it, and you’re not even aware that you’re distracted. But you are distracted, and as a result, you can’t pick up on a lot of the social signals that are being communicated by other people, and interactions with bosses, team members, and clients or patients are harmed by that,” Bamberger said. “We actually demonstrated that in a field experiment using medical simulations; we brought in doctors to a medical simulation center where they were working on mannequins.

“Simulation centers are increasingly used to train doctors; they have all the equipment there: They can intubate, they can see X-rays, they kind diagnose and treat maladies,” he said. “So we look at the way they interact with each other; how do they try and transmit information to each other? How do they share tasks?”

Bamberger and colleagues recorded the medical team processes while working at the medical simulation center.

“We look at their diagnostic performance, their treatment performance, and their general patient management in an intensive-care context,” Bamberger said. “First of all, what we find is that individuals who are experiencing rudeness have significantly poorer performance than those who don’t.

“It’s interesting that this rudeness experience at the start of the day has lingering effects throughout the day; it doesn’t just go away after an hour or two,” he said. “The poor diagnostic and treatment performance stays on throughout each of the scenarios that they have to deal with over the course of the day, even after lunch, so they just come in at eight in the morning, they finish at four in the afternoon, and this stuff—being distracted by bosses’ or patients’ rude behavior while they are unconsciously trying to assess any possible threat—goes on all through the afternoon.

“The differences in staff performance pre- and post-rudeness are clear.”

Mentors Influence How Much College Grads Drink

By Daniel Butcher

The quality of mentorship can be a key factor in early-career professionals surviving and thriving at an organization. And more specifically, senior executives’ alcohol use, especially while entertaining clients, has a big influence on junior employees’ drinking habits.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that for at least the three years after graduation, alcohol consumption levels typically don’t change much. But there’s a caveat.

“We do find a couple of factors that are instrumental in getting alcohol consumption to move, which gives managers some clues as to what might be done to speed up that maturing out process for junior employees and hopefully reduce the risk of managers having to deal with people with problem drinking,” Bamberger said. “This is a soft side of the socialization process when these young adults come into the organization, so some of the most instrumental factors have to do with mentoring programs, veteran employees who are there to support the newcomers.

“You have to be a little bit careful there, because we did another study in China, where we found that, for employees in sales and sales-support occupations who are social connectors, post-college alcohol consumption moves in the wrong direction,” he said. “Many young people coming into these positions within three months after graduation show patterns of hazardous drinking.

“We demonstrate that, in such cases, their ‘mentors’ are their clients who end up ‘teaching’ them how critical it is to drink in order to build trust and close the deal—now, this may be more of a sales-department client-related phenomenon, and it may be more intense in China than other parts of the world.”

In China, it’s well-known that salespeople can’t close a deal unless they show their clients a good time the night before a meeting. Such occasions often include heavy drinking. However, Bamberger notes that many companies based in many countries worldwide, including across Europe and the United States, have salespeople and clients who also have behavioral patterns like that.

“The socialization [process] is [influenced by] mentoring by certain individuals, which can be problematic,” Bamberger said. “But our study with a college students in the U.S. finds that where you have that kind of support, particularly with newcomers mentored by veterans with low or moderate levels of drinking, you can expedite the pace at which young adults mature out of this pattern of a high level of alcohol consumption.

“There are other factors and things that managers can do [to help expedite that maturation process] as well, some of them having less of an effect, including a review of alcohol-drinking policies as part of the orientation program—our findings are that that doesn’t do very much,” he said.

“Managers do need to look at what else worked to reduce problem drinking among their younger team members.”

Pay Transparency May Breed Malicious Envy

By Daniel Butcher

Overall, researchers have found that pay transparency benefits organizations with fair compensation structures by incentivizing top performers to continue working hard and reducing turnover of talented contributors. But in certain situations, it can breed envy of high earners and undermine organizational culture.

Academy of Management Scholar Peter Bamberger of Tel Aviv University explained that envy can be either benign or malicious, with benign envy increasing a person’s motivation to help others, while malicious envy tends to decrease motivation. Bamberger said that in cases he studied where pay transparency bred malicious envy among colleagues, the frequency of employees helping one another decreased.

“So if I’m envious of you, and I can see that you’re having difficulties at work, will I help without you coming to me and asking for assistance? Will I come to you and say, ‘Hey, I can see you’re having some problems, here’s advice or some type of information that could help you solve some of the problems that you’re experiencing?’” Bamberger said.

“I’m less likely to do that if I’m feeling envy toward you, and I’m more likely to feel envy toward you under conditions of pay transparency,” he said.

“For people who are natural helpers, it won’t make much of a difference, but for most people, particularly among those who are more competitive or have less prosocial motivation, it can make a big difference.”

Some business leaders and managers complain that transparency is problematic, because it makes people jealous, but Bamberger and his colleagues didn’t buy that argument. Their hypothesis was that people are jealous whether pay is transparent or not, and they imagine what other people’s pay is and base their jealousy on that.

“Whether or not employees see other people’s pay, it’s still a basis for jealousy, because they believe the worst,” Bamberger said. “The difference when pay is transparent is that it’s slammed in your face, and you can’t deny it, and therefore, it’s particularly in that case where the malicious envy can be sufficiently robust to be problematic, while one of these problems was reduced unsolicited helping among coworkers.”

Pay Transparency Reduces Compensation Differentials

By Daniel Butcher

Pay transparency can lead to pay compression, in which employees’ compensation—regardless of whether they’re long-tenured or new, high-performing or just sliding by—tend to cluster around an average or median level for a particular role.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that people perceive their employer’s compensation structure to be unfair tend to leave the organization. In those cases, pay transparency can interfere with employee retention goals. But he’s found in his research that pay can be a moving target, where pressure to recruit can drive up new hires’ compensation, higher than longer-tenured employees serving in similar roles.

“It’s important to see what the impact of pay transparency is on individual behavior, but we also want to see what happens with turnover rates at the firm level,” Bamberger said. “The argument was based on several research papers in economics in particular with consistent findings that when pay becomes more transparent, it also becomes more compressed.

“Essentially, managers differentiate between stars and poor performers less and give everybody more or less the same or a similar raise and bonus,” he said.

While the economists didn’t really look at the mechanism as to why that is, Bamberger and his colleagues did examine that and came up with a theory to explain the trend.

“The argument is that managers are kind of lazy, and they prefer not to have to deal with an employee coming in and demanding that they deserve more than someone else,” Bamberger said. “So when pay is transparent, regardless of differences in individual contribution, they just give everyone the same level of pay increase or bonus.”

Pay Transparency Can Push Reward Inequities Under the Table

By Daniel Butcher

Performance-based pay—including merit-based salary increases and bonuses—can be complicated by pay transparency rules that make the details known to coworkers, according to Academy of Management Scholar Peter Bamberger of Tel Aviv University.

A reaction to that can lead to pay compression—when wages for low-skilled or low-performing workers and wages for high-skilled or high-performing workers move closer together—or an increase in requests for deals with special perks, also called idiosyncratic deals or i-deals. I-deals are non-standard work arrangements that individual employees negotiate to get remote work or flexibility, training opportunities, special assignments, and even performance benchmarks that would trigger bonuses. I-deals are often used to reward high-performing candidates and employees who have specialized skills in the hopes of retaining them long-term.

“You can imagine, if you’re a star performer and your bonus or merit-based raise is lower than it’s been before, you’re likely to think about leaving that organization and going to work somewhere else—and that’s exactly what some economists have found, that where we have pay compression, the star performers actually pick up and leave,” Bamberger said. “I recently published a paper that also shows the same thing, that pay compression very quickly leads to star performers’ departure.”

So what can organizations’ leaders do?

“What we find is that employees don’t necessarily push for more money; they make their requests for other types of rewards, primarily benefits as part of what we call idiosyncratic deals, things like the number of days per week that they can work from home or the number of weeks per year that they can work from Hawaii,” Bamberger said. “There’s a large body of literature on i-deals in management, and they include various types of benefits packages.

“What we find using data from about 120 organizations in China is that where pay is more transparent, the differentials in the pay of higher and lower performers are more compressed,” he said. “Perhaps because such a situation could drive higher performers to look for alternative employment, when pay was more transparent, employers rewarded the higher performers in other, less observable ways using these idiosyncratic deals. If fact, higher performers asked for these types of deals, and in 50% of cases where they ask for it, they got it.

“What’s actually happening is that transparency is shifting the pay differential from where it can be seen, annual raises and bonuses, to those types of rewards where it’s not transparent, that is, idiosyncratic deals.”

Two Factors that Determine Young Professionals’ Drinking Levels

By Daniel Butcher

Early-career professionals often drink as much alcohol as they did in college or even more after graduation, especially if they’re working in a sales role with a boss or mentor who drinks a lot, research shows. But young workers in roles that make them feel empowered and who are surrounded by supportive coworkers who tend to drink alcohol in moderation are more likely to deal with socialization and stress in healthy ways and avoid problem drinking.

That’s according to Academy of Management Scholar Peter Bamberger of Tel Aviv University, who said supportive peer relationships with abstainers or moderate drinkers can be influential, as can jobs that provide a higher level of psychological empowerment.

“A combination of the two—peer support and empowerment—make it so that people aren’t as stressed out by being given roles and tasks that they may not be able to handle, because underlying a lot of what’s involved with this drinking are two main motivations,” Bamberger said. “One is a normative social motivation to go out and drink to become socially integrated in their workplace.

“The second is a stress motivation: ‘This is how I coped with stress in college; I went out to drink, and now I do the same thing at work,’” he said. “One of the critical things that we show in our research studies is that if managers can find alternative ways of coping with stress, actually being proactive in terms of trying to address some of the stressors that newcomers face at work, like uncertainty, they may be able to speed up that maturing out process that can lead to reduced levels of alcohol consumption among early-career professionals.

“Support from peers and psychological empowerment were keys to success in that.”

Binge Drinking Decreases After College, Right? Not So Fast…

By Daniel Butcher

Contrary to popular belief, university students don’t get drinking out of their systems during their college years before entering the workforce. Studies show drinking levels increase after graduation and peak in the mid-20s.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that especially for some client-facing roles such as sales, on-the-job pressures and social situations often lead to increased alcohol consumption among young professionals.

“The common perception is that people’s drinking is at its highest levels for young adults, at least when they’re in college, and then as soon as they get out of college, they take on employment; they start their career, and their drinking very quickly declines,” Bamberger said. “However, there’s been some indication already for the past 10 years that that may not be the case.

“In fact, the data on young adults shows that, particularly among college students and twenty-somethings, the peak levels of alcohol use and misuse are actually at around ages 25 and 26, and they’re continuously rising after graduation,” he said. “It’s not like people graduate from college and mature out of their drinking—the party continues.”

Bamberger and colleagues have studied different profiles of alcohol drinkers. Their research findings don’t always align with popular narratives about booze consumption.

“We’ve looked at how people drink alcoholic beverages, how frequently and when they drink, and there are certain patterns that are more problematic than others,” Bamberger said. “First of all, where individuals engage in heavy episodic drinking, like binge drinking, and they do it more frequently, and they do it not necessarily only on a weekend but during the week as well, that’s a very risky pattern.

“And then you have more in the middle of the range, moderate traits and patterns, and then you have patterns like only drinking socially or only on special occasions, and you have abstainers, but and most college students do drink—most are not abstainers,” he said.

“We have these three patterns among people who drink, and when we look at the likelihood of people shifting from a really risky pattern of heavy drinking to a more moderate pattern, or from a moderate pattern to light drinking, what we find is that these patterns are in fact rather sticky.”

Young Heavy Drinkers in Non-STEM Jobs Earn More Money

By Daniel Butcher

There is no meaningful correlation between levels of alcohol consumption and compensation among early-career professionals working in roles focused on science, technology, engineering, and mathematics (STEM). But heavy drinking is associated with higher pay for non-STEM professionals who are recent college graduates.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that he and colleagues have researched levels of alcohol consumption and compensation of STEM professionals versus those working in non-STEM fields.

“We were looking at the link between consumption patterns and income growth in the initial years of employment after graduating from college, and surprisingly, what we found is a positive relationship between drinking and income growth in non-STEM roles,” Bamberger said.

“The findings are actually capturing the dynamic that, if you’re not in a STEM job and you want to move up in the organization, you need to engage in these social practices that often revolve around alcohol, and the more you do that, the higher your growth in income is going to be,” he said.

That finding is—at least in part—tied to the prevalence of non-STEM professionals working in sales, marketing, distribution, customer-service, and business-development roles who routinely partake in adult beverages while meeting with clients and prospects.

“A lot of non-STEM people are engaging in marketing and sales and support in building and maintaining relationships with customers,” Bamberger said. “In STEM roles, they’re working in a lab or in front of a computer terminal coding, so there’s less of a role for alcohol as a basis for increasing your salary—drinking is not going to do a hell of a lot for your career if your role isn’t client-facing, right?

“But early-career non-STEM salespeople who drink on the job with clients may be more likely to get promoted and rewarded financially,” he said. “That was the logic behind the research, and that’s what we actually found.”

However, there’s an obvious caveat. Bamberger noted that recent research shows that daily alcohol intake—even in moderate amounts—increases drinkers’ risk of health issues.

“There have been a couple of studies that have come out recently that that directly contradict the line that’s been pushed a lot by a lot of the alcoholic-beverages companies, which is that having some wine with your meal every day is going to prolong your life—it’s healthy,” Bamberger said.

“You’re best off not drinking any alcohol whatsoever, not so much because of its implications on mental health, but rather largely because of its implications with respect to alcohol as a carcinogen, specifically as a leading cause of esophageal cancer,” he said.

“Many younger employees nowadays recognize the risks in drinking; a lot of young people are actually picking up on those problematic implications of drinking alcohol even at the lowest levels and understanding that health risk.”

Rudeness Doesn’t Motivate Workers—Quite the Opposite

By Daniel Butcher

Some business leaders and managers resort to barbs or even shouting to motivate staff members, but research shows that a coercive leadership style is counterproductive. In fact, civility leads to improved team cohesion and performance, while rudeness hurts workers’ performance.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that several research papers on the subject explore the implications that emotion-laden events in organizations have on interpersonal relations and team dynamics. In a nutshell, rudeness creates a huge distraction that undermines productivity.

“For example, why can’t you text and drive at the same time? When you’re driving, the reason you don’t text is because—aside from it being against the law—you’re distracted,” Bamberger said. “It’s a complex process to text—it takes your attention, so you have limited cognitive resources, and driving is also complex.

“Whatever goes to the texting is not available for driving, and the result could be death,” he said.

What’s the connection between texting while driving and leadership style, as well as interactions between coworkers? Rudeness and even mild incivility are actually highly emotional events that occur frequently in the workplace.

“Many, many employees experience rudeness at work, and it’s rather ambiguous,” Bamberger said. “It’s not like being bullied or attacked physically, but in response to rudeness, you’ve got to try to figure out what is threatening to some degree, but you don’t know how threatening it is.

“And precisely because of that, and largely unconsciously, your brain is engaging and trying to determine the degree of threat,” he said. “That’s not a mindset that’s conducive to analysis, attention to detail, or any type of thought-demanding work.”