Income inequality can be defined as the uneven distribution of opportunities, assets and the profits in a given organization. Despite not always being apparent, its consequences are still intense. The individuals who are hard hit by this problem are the workers who occupy the lowest positions in the organization. Despite enduring a lot of economic hardships, the management is not sharing in the plight because they are not affected by the inequality (Tsui et al., 2018). Income inequality in the workplace has a significant impact not only on the quality of an organization but the economy of the country as well.
One of the impacts of income inequality in the work place is resentment among the employees. Most of the workers will develop a negative attitude towards their job. Working with a negative attitude means that the employees will not be as productive because they will be disengaged from their job and will not do their best in their careers (Breza et al., 2017). Moreover, they will be absent for most of the working days and will even engage in vices that may harm the economy and profitability of the organization. Such acts include theft and sabotage. Furthermore, the workers will not see the worth of working hard because after all, their hard work is not appreciated and they will hate the management who make a lot more than them despite not working as hard as them.
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Inequalities in the workplace reduce the quality of the organization. The dedication of the employees to their work will decline and they will not see the need to remain loyal to an organization that does not pay them fairly (Clements-Croome, 2016). What makes the circumstance worse is when the management is far wealthier than the workers. If there were equal pay, perhaps the employees would have been incentivized to give their best to increase their shares. According to Breza et al. (2017), employees will avoid promotions that would mean an increase in their duties, as well as their skill because of the lack of the improvement in reimbursement.
Additionally, employees who are dissatisfied with their pay are also de-motivated and cannot provide quality customer service. According to Breza et al. (2017), customers are the most crucial stakeholders in the organization because it is through them that the organization makes a profit. Successful organizations are those that serve their customers with respect and with professionalism. If the quality of customer service deteriorates, the organization will stand to lose its clients to their competitors. What’s more, the organization will not only lose its clients through poor customer service but also through the reduction in the quality of the products they sell to the consumers.
Furthermore, the avoidance of promotion by competent and experienced employees results in leadership problems in the workplace (Breza et al., 2017). The company will have to employ new individuals who do not understand the organization, as well as employees who have worked in the firm for many years. The reason why the employees will not want to rise to the higher ranks is that there will not be fair compensation despite the additional responsibilities they will have to take up. The employees will also not see the need of advancing their careers because there is nothing that motivates them to do so. Besides, the pay that they receive is too little such that they can’t afford to pay for their further studies.
The motivation of the employees can be promoted through equitable distribution of wealth that is realized in the company (Breza et al., 2017). Appreciating the efforts of employees to bring success to the company will go a long way in ensuring that they remain loyal and they serve their organization with commitment and dedication. Besides, brilliant workers require fair and equal pay. When they feel that their pay is equitable, they will steer their organization towards success.
References
Breza, E., Kaur, S., & Shamdasani, Y. (2017). The morale effects of pay inequality. The Quarterly Journal of Economics , 133 (2), 611-663.
Clements-Croome, D. (Ed.). (2016). Creating the productive workplace . Taylor & Francis.
Tsui, A. S., Enderle, G., & Jiang, K. (2018). Income Inequality in the United States: Reflections on the Role of Corporations. Academy of Management Review , 43 (1),
156-168.
