Race-based Shifting Standards and Financial Compensation in the Workplace

Abstract

The present study examines the relationship between race and financial compensation within the workplace. Specifically, this study uses the Shifting Standards Model (SSM), which says that people are influenced by stereotypes when making judgments, as a framework to describe why raise amounts for two identical employees might differ based on race. In SSM, the influence of the stereotype is visible on an objective scale but hidden on a subjective scale. Participants are asked to think of themselves as a Human Resource Manager giving an employee a raise. Based on objective information that is given about the employee, who is either White or Black, the participant will be asked to give a raise in an objective, dollar amount. Then, the participant rates how large that raise is on a subjective scale. The SSM predicts that the Black employee will be given a smaller raise, which would then be rated as subjectively equal, or possibly better, than the higher objective raise the White employee is given. Preliminary data analysis indicates results in line with the predicted pattern, where the Black employee receives a smaller objective raise than the comparably described White employee, even as their raises are described as subjectively the same.