This change has positive implications for superiors as well as subordinates.For example, then no one of the incentives to compete for the boss's job is removed. Gone, too, is the tension that can build when an ambitious subordinate covets job and will do anything to get it. In short, if some of the authority of hierarchy is eliminated, so is some of the hostility.
In most traditional organizations, however, the idea of earning more than the boss seems insupportable and, to some people, clearly inequitable. 'There are, of course, organizational precedents for situations in which people in lower ranked jobs are paid more than those above. Field sales personnel paid on commission can often earn more than their managers; star scientists in R&D laboratories may earn more than the administrators nominally placed over them; and hourly workers can make more than their supervisors through overtime pay or union-negotiated wage settlements. But these situations are usually uncommon, or they're accepted because they're p of a dual-career ladder or the price of moving up in rank into management.
To get a feeling for the kinds of difficulties pay imbalances reate in hierarchical organizations, let's look at a less extreme case in which the gap between adjacent pay levels diminishes but does not disappear.