Pay inequality in organizations shapes pay‐based stereotypes

Abstract There is some evidence that organizations with higher pay inequality have more problematic social dynamics. The present research examines whether introduces pay‐based intergroup dynamics and shapes the stereotypes of highest‐ lowest‐paid employees in workplace. In two studies (a cross‐sectional survey N = 413, an experiment 286), we found greater (actual or perceived) strengthened perceptions highest‐paid were assertive not. Indirect effects analysis suggested this could be due, part, to increased tendency perceive highest as distinct groups. We also (but not lowest‐paid) immoral unfriendly. assume negative relations. Together, our suggests groups ways undermine organizational functioning.