When star players earn unequal pay, NBA teams lose games - a study with lessons for any workplace

LeBron James earning more than the bench player makes sense. LeBron earning less than a comparable starter does not.

Pay differences between the best and worst performers on any team are expected, accepted, and largely irrelevant to team dynamics. Everyone knows - or should know - that the star earns more than the backup. The psychological friction that undermines team cooperation comes from a different kind of inequality: when two players at a similar level of importance to the team's success are paid significantly differently from each other.

That distinction is the organizing insight of a new study from Washington State University, published in the journal Human Performance. Jeremy Beus, a professor in the Carson College of Business and lead author of the study, used 11 seasons of NBA data to examine what happens to team performance when pay inequity exists not across the entire roster but specifically among the core players who matter most to outcomes.

The finding: teams with pay inequity among their five highest-minute players won fewer games - and the mechanism was not reduced effort but reduced coordination. Players were still working hard. They were working out of sync with each other.

Why coordination, not effort, is the key variable

"For a team, it's more than just effort, it's also coordination, which includes effort but it has to be coordinated effort," said Beus. "Merely working hard does not necessarily help the team. It needs to be coordinated effort."

This distinction matters because it changes the diagnosis of what goes wrong when pay inequality creates problems. The intuitive story might be that underpaid players reduce their effort - they mail it in, they stop hustling. But the data tell a different story. Teams with core pay inequity showed drops in coordination metrics while effort metrics were relatively unaffected. Players were still putting in the work; they were just doing it in ways that did not mesh with their teammates.

Beus and co-authors Shaun Parkinson (now at New Mexico State University) and Jay Bates (Rutgers University) tracked two variables as measures of team coordination: rebounding (which requires multiple players to position correctly relative to each other and to the ball) and assist-to-turnover ratios (which capture how well players anticipate each other's movements and decision-making). Both dropped in teams with core pay inequity. These are not measures of individual skill or effort - they are measures of how well a group functions as a unit.

Not all pay variability is the same

The study's conceptual contribution is to distinguish inequitable pay variability from legitimate pay variability. Most teams have higher- and lower-performing members, and paying them differently is appropriate. "If the variability in pay is based on variability in performance, there's no reason for anyone to feel there is unfairness," Beus said. "If LeBron James makes more than me as a guy on the bench, I obviously expect that."

The problem arises when two players at a comparable level of contribution to the team - defined here as the players logging the most minutes, implying the coaching staff considers them equally important - are paid significantly differently. In that scenario, the player receiving less has grounds for perceiving the disparity as unfair, and the research suggests that perception affects behavior in ways that harm team outcomes.

The NBA data from the 2009-2010 through 2019-2020 seasons offered a natural laboratory for this question. Player salaries and performance statistics are publicly available. Basketball requires genuine interdependence - unlike baseball or track and field, where individual performance largely determines outcomes regardless of teammates' behavior, basketball success requires synchronized decision-making across five players simultaneously. And winning percentages provide a clean measure of team performance.

Implications for managers outside basketball

The study is explicit that its findings have implications beyond sports. Any workplace with a group of similarly-ranked employees performing interdependent tasks faces the same dynamic. When "core" team members - the people whose cooperation is most critical to team output - are paid in ways that some perceive as inequitable relative to their peers, coordination suffers.

The recommendation for managers follows from the mechanism: ensure that pay among top performers is equitable relative to their contributions, and explicitly emphasize coordinated effort as a team goal rather than focusing solely on individual metrics. Teams where coordination is the expressed priority may maintain it more easily even when some pay differentiation exists, because coordination is established as the shared objective.

The study has the standard limitations of observational research using field data. Causation cannot be established with certainty - teams with other problems may both underpay some players and coordinate poorly, with a common cause driving both. The NBA context is also atypical in that salaries are publicly known to all team members, which may amplify the psychological effects of inequity compared to workplaces where compensation is kept private.