Composition and Compensation: The Moderating Effect of Individual and Team Performance on the Relationship Between Black Team Member Representation and Salary

Despite considerable focus on how the demographic composition of a workplace (e.g., the representation of minorities, women) may adversely affect the salaries of all individuals within that workplace, few researchers have investigated the factors that may impede this deleterious effect. In two distinct samples of multiracial work teams and one experiment, we test the moderating factors that attenuate or exacerbate these demographic influences on the monetary assessments of individuals' worth. Specifically, we demonstrate that the proportion of Black coworkers on a team is more negatively related to individual compensation for poorer, rather than higher, performing individuals or teams. Experimentally, we show that when performance is lower (individual or team), having more Black coworkers on a work team is related to greater stigmatization and, consequently, lower salaries. No such indirect effect is present, however, when performance is higher. These studies demonstrate that, under poor performance, the pernicious effects of stigma may have a wider reach than previously believed. Theoretical and practical implications of this finding are discussed.