Office Romance, Anyone?!!

"We specify the two years before cohabitation as the 'dating period' and define the first year of this period as the event year of interest when estimating the impact of forming a relationship with a coworker." 

"A potentially useful firm-level intervention based on our results is to prevent managers from having a direct influence on the career trajectories of their subordinate partners."

"Our  findings suggest that other employees dislike these relationships, particularly when they are associated with higher earnings for the subordinate partner."

"This means that regardless of whether the earnings gains obtained are due to favouritism, the appearance of favouritism should be curtailed as it can lead other workers to leave the firm." 

"Regardless of the cause, higher earnings gains for those in relationships with a workplace manager could lead to resentment among co-workers who might [rightly or wrongly] view this as preferential treatment."

Researchers: British Columbia/California/Finland

Photo: Liubomyr Vorona / iStock / Getty Images

 

Published by the National Bureau of Economic Research in Cambridge, Mass., the paper, The Impacts of Romantic Relationships With the Boss is an intriguing study of the development of intimate relations between an employee and that employee's supervisor, out of which rises preferential treatment seen in improved position, increased salary, and the offense such a situation draws from other employees recognizing the office romance as unfair and possibly injurious to their own aspirations toward upward mobility and recognition.

 

The conclusion of the study producing the paper examining links between relationships with an executive and an employee and increased salary concludes that  entry into such a relationship with a manager sees the subordinate's earnings increase to an average of six percent. On the opposite side of the relationship ledger, a sundering of the relationship has the effect of triggering an 'abrupt' 18 percent decline in earnings. As well, a side effect enters the picture...that of other workers' perceptions of such romantic relationships. To the extent that the greater the subordinate's wage gains, the greater the demoralizing effect on other employees. 

 

 Data retrieved from Statistics Finland were used by the researchers to analyze employment administration statistics of Finnish office workers over 3 decades in a variety of sectors. Salary information for 1,020 manager-subordinate workplace couples as well as 728 instances of relationship breakdowns were studied by the research team. The end of a relationship was identified as the moment the workplace couple stopped living together. Determining a relationship's inauguration proved more elusive.

 

 

 

"Understanding the economic impact of these interactions (of colleagues who begin a relationship but live separately) would be interesting, but it is beyond the scope of our data", they stated of the study that recognized mostly female subordinates dating male managers to discover that these women realized raw earnings growth of 22 percent between the year before the dating period began and the year following, in comparison to 16 percent growth in the same period among a control group. 

 

 A "clear and stark pattern" for women was found who broke up with a workplace manager, whose earnings fell by 18 percent the year following the breakup whereas women who broke up with a manager from a different workplace saw slower earnings growth yet no earning drop. The researchers attempted to determine whether the salary bump was related to favouritism or whether it was merit; the second likely if the subordinate was picking up new skills or being mentored by the new partner. 

 

"While it is challenging to distinguish between the two, we provide some suggestive evidence", they concluded. Salary increase dropped dramatically if either partner moved to a new workplace while the relationship continued. Workplaces where manager/subordinate relationships occurred, also were those where a higher number of workers departed, of both sexes. A workplace with 71 employees on average would experience an additional four departures linked to romantic entanglements. 

 

The conclusion was that a more direct intervention would be the banning of such relationships. McDonald's for example fired its CEO in 2019 as a result of a consensual relationship with a subordinate. "Yet such bans come with their own costs. If similar rules had existed at Microsoft or Sidley Austin Law Firm, Bill and Melinda Gates and Barack and Michelle Obama [respectively] would have been barred from dating." 

 

 Asia Business Daily