... One study published in the Academy of Management Journal in April suggests pay transparency requirements in the United States, United Kingdom and China, lead managers to compress base pay and make secretive arrangements with individual staff to keep them satisfied. “It’s very hard to have a very legitimate, 100-per-cent bulletproof reason [to pay people differently], so managers will try to mitigate that problem by paying everyone more or less the same,” says the study’s lead author, Leon Lam. “Pay compression will trigger the employees to make idiosyncratic deal requests – they feel like they deserve more, so they raise their hand to ask for more – and subsequently our research shows managers tend to grant those idiosyncratic deals.” Mr. Lam says in practice pay transparency can move hidden discrepancies in compensation from base pay to other forms of compensation – such as vacation time, flexibility and advancement opportunities – over which managers often have more discretion. “The purpose of pay transparency is to put everything on the table,” says Mr. Lam, who completed his undergraduate degree at the University of Toronto and is currently based in Hong Kong. “Managers, instead of putting it on the table, they will grant those side deals, so it goes back under the table; that is the counterintuitive part.”