An organization's internal pay structure can influence how employees perform according to company strategy. Where a worker's performance does not only depend on the level of pay he receives (Solow, 1979, in Alexopoulos & Cohen, 2003), but also takes into account his pay compared to superior and inferior workers, those belonging to the same professional group and the external labor market (Akerlof and Yellen, 1990). Pfeffer (2005) argues that wage compression, which is the act of reducing the size of pay differences between employees, improves productivity. To gain competitive advantage, organizations must recognize not only hierarchical pay compression (between management and employees) but also differences between individuals at similar levels. Reducing pay discrepancies in a team-based environment promotes a sense of community and common destiny, leading to greater efficiency as it reduces interpersonal competition but increases collaboration (Pfeffer, 2005). Wage compression therefore supports equity theory; that if internal factors and external competitiveness are aligned, employees perceive their pay as fair and exert maximum effort (Milkovich, Newman, Gerhart, 2011). From this point of view, compressed pay is seen as a motivational tool to incentivize workers because there is no added value due to an individualistic nature, but rather a collective tendency. Pfeffer (2005) also argues that wage compression helps deemphasize pay. This in turn creates employees who are not driven by compensation but value organizational attributes such as people, as well as doing work that is exciting and rewarding for them. By equalizing wages, you draw attention to intrinsic forms of motivation. If pay is less important, it means motivation... center of paper... A Kantian theory of meaningful work. Journal of Business Ethics 17, 1083–1092. Hibbs, D., & Locking, H. (2000). Wage dispersion and production efficiency: Evidence from Sweden. Journal of Labor Economics 18, 755–782. Kraft, K. (1994). Wage differentials between skilled and unskilled workers. Weltwirtschaftliches Archiv, 130(2), 329-349. Lallemand, T., Plasman, R., & Rycx, F. (2004). Intra-firm wage dispersion and firm performance: Evidence from linked employer-employee data. Kyklos, 57, 533-558. Lazear, E. (1989). Equal pay and industrial policy. The Journal of Political Economy, 97 (3), 561-580. Milkovich, G., Newman, J., & Gerhart, B. (2011). Compensation (10th ed.). Singapore: McGraw-Hill.Pfeffer, J. (2005). Produce sustainable competitive advantage through effective people management. Academy of Executive Management, 19 (4), 95-108.Plimmer?