Figure out how much you should be paid (and three cheers for transparent salaries)
Do you know the salary of every employee at your company? I think you should.
I mean, who is being protected by secret salaries? Certainly not the employee—the more transparent salaries are, the more accurately an employee can assess his or her value to a company.
You’d think that companies benefit from secret salaries and that’s why they keep them secret, but really, if salaries were 100% accurate—perfectly pegged at the employee’s worth to the company—then the company would have no problem revealing all salaries.
The only people who benefit from secret salaries is the human resources department. If they make an error, they can hide it. No one will know. And then they can make ten errors. Because no one knows if the secret salaries are hiding one error or one hundred.
So large companies keep salaries under wraps in order to hide all the mistakes, making the cost of transparency high. But today smaller companies often make salaries totally transparent.
I haven’t done it quite yet with my own company, but I'm going to. I’ve been giving everyone some data just to get them ready for the big picture. Almost everyone is not happy, because even in my little start-up, I’ve made salary errors.
For example, the person who was underpaid was not so much jubilant about a potential raise, but upset about his current underpayment. The person who's losing the housing allowance mostly for tax purposes does not seem to mind. The person who is making way more than everyone else minds a lot that I’m planning on revealing everyone’s salaries. But honestly, I think that person will work much harder if everyone knows the truth. And it should be that way.
This experience has taught me that you should always try to get to a company that has out-in-the-open salaries, because that means you have more out-in-the-open managers—managers that have so much self-confidence in their ability to value accurately a business contribution that they can set airtight salaries and stand by them.
Of course, most companies are not there yet. Especially the larger ones. Fortunately a bunch of companies have arrived with tricked-out tools for figuring out what you should be getting paid. And what your co-workers should earn as well. Here’s a sampling of the top tier of those companies:
Payscale.com is my favorite. In fact, I like them so much that I was mentioning them in all my speeches and then I asked them to do a sponsorship with me. (And they did.) So, anyway, the reason I like Payscale is that they systematically collect data in very specific categories so you can match your situation—years of experience, geography, education—to get your real value in the market. Bonus: These are the people who bring you statistics on the real cost of corporate meetings.
Salary.com is a good one if you are trying to get a raise. Salary.com is not as thorough as Payscale with its data collection. So employers generally favor Payscale. But Salary.com skews higher than Payscale, so if you have to bring a first number to the negotiating process, use Salary.com. Bonus: These are the people who bring you the statistics on how much a housewife is worth.
But really, if companies are smart, the conversation about salary will go quickly. You tell the company how much you’re worth. You bring very good data to back that up, and the company pays it. Then other factors like company culture become much more important.
That's where Glassdoor comes in. It’s US magazine for the company you are considering—a little gossipy, with first-hand information about companies from the people who suffer in them. Bonus: Glassdoor is a new company and there are not a lot of competing perspectives on the site yet. So if you drop a bomb about the place you work, it’ll hit hard.
Penelope,
Finally! It's nice to hear people talking about transparent salaries, maybe there is hope after all. I wrote about this concept taken a step further on my blog as well. One problem that I still have is this idea of looking at salary sites, or making comparisons to other companies, as to how a business should compensate employees for the value they provide.
It doesn't make any sense to me to pay someone based on what someone else is paying them and it has gotten to the point now that no one even looks to see if they are making a profit off of the value an employee provides versus what they pay them, because all anyone looks at is what other people are paying them for an equivalent position.
This to me seems very dangerous. First, in my opinion an employee should be compensated commensurate with the value they provide the company, regardless of what another company might offer them. If another company would offer more than the value that employee is providing you then they are doing you a favor by wooing them away.
The problem of course is metrics to determine value. There is no doubt that this is hard, but I feel that it is a task that must be undertaken in every business. How can businesses continue to employ people that provide them negative value and still survive? It seems nearly all traditional businesses practice in this fashion and it makes absolutely no sense to me.
Shameless plug: http://pdotday.com/post/2007/10/Value-Determination-and-Ethical-Compensation.aspx
Do you know the salary of every employee who works for Boston Globe?
I love this idea, but transparent salaries will never happen at my organization (a Fortune Magazine ‘best place to work’), for the reasons you mention. HR doesn’t want people knowing that the schmuck in the corner office who has been promoted to a level of incompetency is pulling in a quarter million a year.
The whole corporate politics thing makes this entirely too messy for most firms to put into practice.
I used both Payscale and Salary.com for negotiating my starting salary and subsequent promotion salary – these sites provided the ammo I needed to support a 12% raise earlier this year.
I think salary transparency is a wonderful concept, though. Do you happen to know of any large, well-established organizations that are doing this today?
There is a 4th website to compare your salary: http://www.paywizard.org.
Makes sense for a smaller company, where the roles are not as defined and everyone has a hand in the overall success. However, attach that to a company with 10,000 employees, it becomes more vauge. However, I believe my company does it rather well. There are different levels (15-23) attached to each position, and there is a scale for each level. So while I don’t know how much my co-workers may make, I know within a range, which I think is fair. Frankly, I don’t like the idea of my co-workers knowing how much I make. It’s none of their business.
This is actually a field where the government is ahead of the curve. I work for the U.S. government and salary is quite transparent and everyone knows roughly what one makes. Individuals are attached a level 1-15 and everyone knows what each one’s level is. There is some pressure when a 14 isn’t pulling his/her weight. And praise when a 9 is really doing a great job and doing 14-level work.
I’ve got to say I totally disagree –I think that complete salary transparancy could be very destructive, particularly for a small company.
While I certainly don’t disagree that management/HR makes salary mistakes, I think the reason to keep salaries under wraps is that WHATEVER the salaries are, given the nature of human perception, SOMEONE is going to disagree with them (and not just the person whose salary is lower).
Questions about peoples “value to the company” are often subjective and difficult to measure — many people have positions that are not easily boiled down to a clear bottom line dollar figure, and even if they did those calculations would be very complex. This basically leaves you with a situation where if you revealed everyone’s salary you’d have a hotbed of resentments between colleagues, as each colleague made their own calculation of people’s worth, using their own methodology, and came up with the myriad ways that their valuations differed from the company’s.
The reason I think this would be particularly destructive in a small company is that in small companies where everyone has worked with each other, everyone has “evidence” to come up with their own valuation of someone’s worth, which again, is likely to differ from the valuation that management generates.
Yikes. I have to say that in the engineering industry, this might be a little bit easier because of tangible skills (although the argument could be made, “How do you prove you have certain skills”), but I have always felt that salary negotiations were such a nebulous science that HR hides the numbers just because there’s no logic behind it. They know the range they HAVE to pay and shoot for the lowest end of that range.
I guess it could be based on the amount of time at a job (like most gov’t positions), but that would kind of clash with a lot of ideas on this site, having 8 different jobs before hitting 30 years old. It would definitely change the way that workplaces compensate and would change the attitude of a lot of workers.
I’m a fan of transparency in the workplace but I think a move to transparent salaries needs to be done carefully especially in smaller companies.
How do you deal with someone who was hired when the market was competitive and got a high salary compared with someone who starts when the job market stinks and people join on lower salaries?
With private salaries the only real measurement is what management thinks that person adds to the value of the company. With open salaries you’re introducing measurements on how co-workers value that employee which may be substanially different.
@Emily
In my experience, the salaries get out anyway. As much as HR would like and commands people to not discuss salaries with their co-workers, they do, always.
By keeping it open and making the rationale for why people are paid what they are transparent, it trumps the gossip and states the values of the organization directly. Those that disagree with the subjective assessment are free to leave and their is no ambiguity as to what that subjective assessment is.
Not only that but those who are not paid a salary they feel they are capable of are now in a position where they no exactly what it takes to earn more, what skills the organization values more than others and what they need to do in order to be more valuable and hence compensated commensurately to the degree they wish to grow.
I will not disagree that this requires a different culture than that most organizations foster, but it is one I whole-heartedly support.
A company cannot forbid employees below the supervisor level from discussing their pay. This would be a violation of the National Labor Relations Act.
I actually wrote a post about this and got some interesting feedback on the brazencareerist site – http://www.leapwalking.com/2008/06/19/knowing-what-others-earn-matters-a-lot/
In my opinion, it does more good than harm to have transparent salaries, because to not have it means that things can really look a lot different than our perceived expectations of different roles.
My point is this – transparent salaries help us all make better choices. It might hurt a bit, but at the end of the day, everyone relies on this expectation on value. It adjusts itself because of our varying interests, skills and wants.
* * * * * * *
Boon – that’s a great post on the topic. Thanks. I wish I had linked to it myself :)
-Penelope
You do practice what you preach. I’m sure you’ll be learning along the way so I’ll be looking forward to your discoveries. I can see why large companies are not eager to adopt salary transparency. It not only would highlight their errors but also increase their workload and allow their decisions to be scrutinized by their employees. It’s a can of worms because it is change from the norm and many people equate self worth and relative worth among their co-workers with their salary. There would have to be clearly established parameters that are easily understood by everyone. It can work to everyones benefit but only if both the company and employees take an active and responsible role.
where in the heck is the thing about bthe pay for gas milegae ?
I came to this site, and nothing was here!
Thanks for wasting my time!
Hmmm…I am conflicted. For one, I can see how it could disrupt an office but I would like to believe that employees could get past that.
I also know that you can easily get most state and federal employee’s salaries via FOIA. I wonder if that screws up government offices (more)?
I guess from an HR perspective, besides the disruption or HR screw up factor, I would cite it may make it easier for recruiters to poach from your business. I wouldn’t want that unless my competitors were also in that boat.
@Lance – I think it would impact less on government offices as job descriptions and roles would be more formalised.
I think it’s the smaller companies where it disrupt most where things are less defined and it causes more variation.
My personality means I fight my case more. How would that sit if I get a higher raise than someone of the same ability simply because I’m more argumentative?
I agree!
I think transparency of salaries is, by and large, a positive trend.
I saw an interesting commentary recently (sorry, can’t remember where) that contradicted this a bit. The author basically said that the transparency idea backfired when applied to upper management, particularly CEO’s.
What was intended to be a way to cap the top dollar amounts instead became a base for companies – a base amount that the executive boards would then have to pile more money/outrageous perks onto in order to bring Joe (or Joan) CEO aboard.
This is a great post on a hot topic. I can see both sides of the argument – larger companies and those with more formalized job descriptions/requirements would find it much less painful to reveal salaries. Small companies, where people know all their coworkers and wear many hats, would find it more difficult.
While I’ve never worked at a company that had open salaries, I did experience a degree of open salary information when I was interviewing for my last job.
While contemplating two separate offers with a significant difference in pay, I tried to negotiate with the company offering the lower salaried position, asking them to raise the salary by a few thousand dollars (chump change in my opinion) to make their offer more competitive.
The HR representative responded by saying that they hired all the other people in that same position at x amount of dollars and it would be unfair to them if they hired me at a higher starting salary.
I felt that this arguement didn’t wash. Did I have the same experience, skills, degree as the other employees? Would I be given rapid raises and promotions should I prove more valuable to the company once I started? Is hiring everyone at the same starting salary the fairest way to distribute salaries?
What do you think?
P – please keep us posted on this experiment. I’m very interested (and frankly, not very hopeful) in how it turns out. In my only expereience with a trasnparent workplace, the turmoil was tremendous. In high school, I worked at McDonald’s, and someone (I guess it is now safe to reveal it was me) found some papers that listed everyone’s pay and most recent raise amount. The word quickly spread and everyone knew. We’re talking near minimum wage (~3.00/hr at that time) and raises in amounts of $0.05, $0.10, or $0.25/hr – so, not exactly earth-shaking amounts of money. Some of the information was not a surprise (“Frieda has been here a long time and is a good, hard worker – her pay seems right”) Others, not so good (“Fred got a $0.25 raise? What did he do to deserve that?”) Management was very upset and word was that if they could have figured out who revealed this information, they would have fired them (that would be me). Luckily for me, they never figured it out. The biggest issues revolved around a few females who where not held in high regard for their work ethic by anyone, yet got very good raises. The fact that they were very good looking certainly played into people’s suspicions.
BTW, I find it very ironic that you would make this post, and then have your estranged husband chime in with a request for the very transparency you are advocating for. Since you don’t seem to mind revealing so much of your life here, I am curious as to your response.
Law firms are very transparent, at least for the first three years. And for partners, you can figure it out by the “points” system. I think it helps law firms. It lets you know where you rank, what associates are doing better, and how much you need to improve. And it was necessary for recruiting purposes.
I think that eventually this will happen in other industries as workers start to realize the value of this. And companies will be forced to acquiesce. People do talk about pay. And you get an idea of your value by comparing yourself to those around you. Especially for skilled workers, while there is some room for negotiation, with law firms and high end consulting firms, if you come in with a JD/MBA you start lock step. It makes sense, and you have an idea of what your increase will be in the future based on how hard you work. If anything, this has to be easier for HR.
In other countries, this is par for the course. I think that transparency never hurts. How could it? And, FYI, from working in an industry that does it, it isn’t hard to publish salary data. And it helps you be more honest and realistic about your performance, which has to be a good thing. And it helps you recruit. Firms with higher pay (aka sweat shops) advertise their pay. Firms with lower pay (aka “quality of life” places) advertise their much more reasonable expectations. It allows people to self select.
I also agree that revealing someone’s higher salary makes them more obligated to pull their weight. Which is also a good thing ;)
For a slightly different opinion on salary calculators, see my article: “Why employers don’t trust internet salary calculators” at http://www.officeherohq.com/2008/03/why-employers-dont-trust-internet.html
I suspect that publishing everybody’s salaries would have a number of undesirable effects, beginning with personal conflicts among coworkers. (“Sophie is making x% more than I am. I disagree about her qualifications. She’s not that smart. And I don’t like her anyway.”) This kind of thing undercuts teamwork and adds to the negative side of office politics — backstabbing, gossip, etc.
I worked in one organization where everyone’s salary was published annually. It was a civil-service agency, and it was far from efficient.
Yes, I agree that HR offices have their own arcane way of arriving at their desired result. What they want is to hire a person at the lowest possible salary. Is it unfair? It is if you assume that a fair wage exists and can be looked up in a table somewhere, like a union scale. On the other hand, if you assume that the market is the mechanism that determines a fair price, then it is fair by definition. The person able to strike a better bargain deserves a better price for his or her services.
At times in my life I’ve been on the short end of wage gaps because I had less bargaining leverage than others. I had a wife and children to support, so I was less able to pick up and leave on short notice, whereas younger, unmarried employees could move on. Or I (as a scientist)was offered significantly less money than engineers were paid for the same non-engineering job, because there were many good engineering jobs on the market.
That’s competition, and that’s life. Get used to it. I did.
I’ll also be curious to see the results of Penelope’s experiment. In my experience, transparency on salaries creates more churn and harm then good. I think a step that companies could take, however, is to be transparent and specific about the pay ranges attached to job grades and what skills/experience employees have to demonstrate to move into those grades.
Really interesting. I just went to Payscale.com and, as I suspected, I’m on the high range for my position. I know I’m making more than my peers at work, and I would be devestated if it was made public.
Aside from the morale effects of transparent salaries (some good, some bad, I'm sure), I think the reason most companies don't want to do it is they don't want to bother doing the necessary preparation and employee education. They also don't want to have to back up their positions with data and logic because it's likely they don't have any.
I think it's a mistake, though, to look to the government for inspiration here. The factors that go into government pay grades are silly and tend to favor mere time in an industry or company over anything else. That's a recipe for stagnation and creates an environment where change/or adaptation of any kind is nearly impossible.
If a company is going to institute a transparent salary schedule, they have to do the work and come up with sensible contributing factors.
Wow, you don’t have a clue. There is a lot of data on this.
This is a subject that really fascinates me. One thing about my life that amuses me most is that I made more money securing grants, scholarships and fellowships as an undergraduate than I did when I entered the workforce. When I took my first job I was underpaid, underutilized and didn’t fight for more because I thought that was just the way it was. Now, even though I’m making good money, it still frustrates me that I can’t “see” the scale that I’m competing on. I always assume everyone is earning more than me…
I wonder, are you going to reveal YOUR salary to your employees? Would you be willing to share it with me? I ask because I have no idea what kind of potential is out there…
One thing I’ve learned as a mgr is that everyone thinks that they are worth more than they are. There is not a more contentious issue that would create more animosity than employees comparing salaries and knowing that a certain slacker (probably a gen Yer) is making more than a better performing employee.
There are too many variables & uncontrollables that determine a person’s salary & it is never apples to apples. I’m all about paying for value but I can’t tell you how many times I have sent up raises for my strong performers & got them knocked down by corporate due to cost cutting.
Penelope-as your finding out everyone will be irritated in some way. The higher paid employee feels uncomfortable having others know that he is making more while the lower paid person feels like they are underpaid. This is a great idea in theory but in practice it is a train wreck. I agree with the idea of salary grades with ranges but never with the idea of total transparency.
I always find salary secrecy such a sensitive issue in this country rather interesting. Everybody seem to be paranoid to have others find out what they’re making not just in the work environment but in their persona lives as well. In Asia, especially the Chinese speaking world it’s very common to have people talk about how much they make in casual conversation.
Transparency, openness and authenticity is great for any organization. Secrecy allows for indiscretion and lacks accountability.
There is one legitimate reason for salary discrepancy. If the company allow for salary negotiation and a employee manages to negotiate a high salary compared to someone that just bend over and take whatever they offer for the same position then the discrepancy is fair.
I have read part of the reason women makes less than men for the same position is because women tend to be passive and not negotiate. In a free market economy we should all try to obtain goods and services for the lowest possible price. If an employer can “buy” the service of his employees at a price that BOTH agrees to then the employee have no right to bitch at the fact that he’s getting paid “too low”.
What about employees who say that making their salary public is a violation of their privacy? Be very careful here….Transparency is great, but many people want what they earn to be private between their boss/employer and them and do NOT want colleagues to know.
Another bone-headed rambling. Just because Penelope is something of an iconoclast doesn’t mean her ideas make sense. There are good reasons why rank-and-file salaries aren’t public and why most people don’t go around talking about what they make. For instance, a culture of envy is bad for business. It’s best to let each employee negotiate the best salary they can…behind closed doors. Again, Penelope shows a misplaced sense of propriety.
“For instance, a culture of envy is bad for business. It's best to let each employee negotiate the best salary they can – behind closed doors.”
Envy is reserved for those that don’t have the balls and/or the ammunition to use disclosed salaries to negotiate a better salary.
The thing about salary web sites is that they can never really accurately provide the salary for an individual, just averages. For example, I do not have a degree but bring as much and often more to my position than my counterparts. So my value should be based on my specific contributions. I have used salary web sites to argue when an organization is way under- or over-paying a position (regardless of the individuals)as some sort of “evidence” that they aren’t current with the national average, and that was very helpful.
I think there are pros and cons to both sides of the argument. Thanks for sharing with us! I personally feel others salaries shouldn’t be disclosed to all; it should be up to the individual to negotiate what they want.
I am an enthusiastic INTJ, not a dreamer, and I’m all for almost any type of workplace transparency, even if it complicates relationships temporarily.
The more transparency there is in the workplace, the more employees will feel that they’re being treated like grownups and will act like grownups. When there’s little or no transparency in important areas such as salary, employees are being “managed” much like children in a day-care facility, and understand that longevity means agreeing to turn over critical aspects of their lives and decision-making to others.
I work in non-profit, where I think you see less range in salary differences. I could probably find out everyone’s salary if I wanted to. But do I? Or do I want to be satisfied that I’m making what *I* think I’m worth? Everyone else’s business is not my own.
I think that if people in my office knew how much I was making as an admin. they would have more respect for me.
I’m curious what you (and others) mean by “transparency”. Do you mean the salary information would be posted somewhere – on some company intranet page? (Does “intranet” even get used anymore? I’ve been out of companies so long, there’s probably something more cutting edge to describe internal communication resources) Or do you just mean that, if inspired to do so, one could get salary information by asking for it? Would the information actually be “pushed” to employees in some kind of memo or email announcement? My initial feeling on this is that general information about salary ranges is useful and allays some of the wasted energy that salary curiosity can bring about. Specific dollar amounts connected to individuals seems like unnecessary fodder for interpersonal (and intrapersonal) strife.
I work for a small non-profit (around 40 people) and I brought up the issue of salary transparency with the president of my company. I was rewarded with a practically screamed diatribe “YOU have NO idea what goes behind salaries. YOU have NO idea what people’s backgrounds are or the plans we have for them in the future. YOU have NO RIGHT trying to figure out what people make.”
Unfortunately for them, we all know what everyone else makes already, because people talk.
The company tries to hide the fact that the highest 5 salaries are made public every year in their 990s. They have also told each of us in person that we are not to discuss our salaries with each other. Unfortunately I didn’t find out that it’s a violation of the National Labor Relations Act until later.
Those pay-scale sites work great IF you know how to define what you do in terms that a standardized database can handle. Which has never been the case with me. I don’t yet have an official title in my new job (or if I do, it’s something meaningless like Program Manager), in which my current range of activities includes videoblogging (from shooting to production), blog management, web stats, blog translation management, community building, community strategy…
No one knows what to call me, and no one else does exactly what I do (even though it’s a large company), but so far they’re all happy with the work I’m doing. Am I being paid a fair wage? I dunno. I’m okay with it for now.
This idea is good in theory, but to put it into practice is another story. As a manager, I honestly would not want to have to deal with the complaints, issues and whining of my employees on the most controversial topic that exists. Honestly, I think this could really detract from a workplace’s collegial environment.
I like the idea of transparency because it would reveal:
1) what gender, race, age, favoritism or other bias is in place at a company – in every division, office, group and team throughout the organization.
2) which departments are strategically important to a company (where the company is investing strongly in high value players), and which departments you should avoid being sucked into (where salaries are lower and flat).
3) which managers are most effective at rewarding their direct reports and standing up for their team come salary review time … and which managers play favorites.
4) transparency should also help good candidates if they got hired at a low salary. Presently in the corporate world making an error in accepting a position at too low a salary can follow you for years. With transparency, a candidate would have much more ammunition to correct the situation quickly once he or she had proved their worth.
Transparency is also a great career development reality check; why is your raise only x? Maybe your manager plays favorites (but this will be harder with transparency), maybe you aren’t pulling your weight – or just as bad – maybe you are pulling your weight, but you aren’t doing a good job of demonstrating your acheivements, or worst of all, maybe your company doesn’t value the contributions you make.
If you don’t get a good raise (when they are given elsewhere) or your peers out pace you at review time, it’s a clear signal to either buck up or buck out because you are not valued where you are now.
Those signals are easily missed with hidden salaries because you might think, or fool yourself, that everyone is in the same boat as you. Meanwhile another year of your life is wasted in a career where you have been sidelined.
Personally I don’t want many folks knowing how much I earn – I guess a reflection of an old fashioned background (I never knew how much my dad earned), but I figure – in a Spock like way – that the needs of the many outweigh the needs of the few. So throw the books open. Award tenacity, merit, worth, hard work, imagination, & creativity!
Businesses live and die by their ability to adapt to the conditions of the marketplaces in which they trade. Doesn’t it make sense that in salary policies they should attempt to correct course to be as nimble and flexible as they are in the external marketplace?
Lower paid employees often want pay revealed and higher paid employees typically do not. Revealing pay is not a decision that should be made at a company-wide level; it should be a personal choice. Changing to a policy where pay is revealed at a company that used to keep pay confidential is like telling a secret without permission that an employee told you in confidence.
Finally, for all those who think they are getting paid what they are worth working for someone else, the reality is that employees are never paid what they are worth because a company has to make money off each employee. If you want to get paid what you’re worth, start your own business.
It may be better for your emotional health to focus on the market rate for your position rather than know too much about others salaries…. If you are underpaid for your skills and experience based on market standards, spend your effort on building your career strategy rather than wasting time on “haves/have nots within a company.” If you are not being paid a fair salary move on – there are other employers in the sea.
All the best (because you deserve it),
Jessica Bond
Though I agree with some of your points, I have mixed feelings about completely transparent salaries. A person's value to my company isn't always represented by the exact dollar amount of their paycheck.
I can’t see this working well in the typical organization, however I’m sure there are thousands of places where it could work.
The big challenge is accounting for city-based industry salary scales. Depending upon the ups and downs of the economy and local costs of living, two people with similar qualifications, doing the same job at a big organization in two different cities might *need* to receive different salaries.
For example, one city is booming with talent shortages and companies poaching each others’ staff daily. The cost of living and inflation are higher here too.
The other city has seen some big employers leave, not as much is going on, there is no talent shortage.
To keep or attract a person in city A, you might need to pay 2x while the person in city b earns x.
If all this were displayed, there’d be resentment in city B most likely. Or, if those at the company in city A were held to the salary scale based on city B reality, they’d be poached by rival firms.
Even though people talk, and salaries are not as confidential as HR might assume, most people only know about other salaries as rumors, not confirmed fact so don’t necessarily put 100% stock in this knowledge.
Publicly stating salaries would remove all doubt and generate a lot of resentment in a large multi-city company like the one I described.
Interesting ill mail you a longer comment penelope
I know if big telcos where their pay system has broken down completely and there is rampent grade inflation with soem people geting 60k$ and up to $180,000k for the same grade.
they also have major problems with gender disparity
This idea will only work in a perfect world where people aren’t competitive and jealous. Unfortunately we do not live in that world.
Italian tax authorities posted the earnings of every person on the web earlier this year. BBC News story on the effects – http://news.bbc.co.uk/1/hi/world/europe/7376608.stm
As much as I might personally love the idea of transparent salaries, there are a few complications that arise from it based on things I’ve observed.
First, this thing definitely benefits the employee and not the employer. It can be used for employees to have leverage and demand more money, yet employers aren’t likely to be able to reduce salaries of the higher end. Individual salaries go up, however slow, but generally don’t come down. Employers (businesses) have a bottom line to keep too and can’t afford to raise lots of salaries or lose lots of employees over this. Even one re-negotiated salary tips the scale in favor of the employee. There needs to be a strong employer motivation too, or at least a demand that forces it otherwise.
Another problem that I saw mentioned earlier is that employees almost always over-value themselves. In business, those that exude confidence often advance faster, even at times if it is exaggerated merit. Also everyone would like to make more money than they currently do, it is human nature. What they say will try and justify that, however good or bad they can argue the point.
Another problem comes in that employees will likely not agree with existing salary schemes, even if there is some employer reasoning behind it. (once again, employee wants to justify his advancement) Often an average employee of 15 years, will have a much larger salary than a star employee of 5 years. This could be due to time at a company, or factors of job switching. While I’m not sure I agree in terms of merit, it is also a factor how salaries naturally grow. In some senses, the more senior employee has earned this over time. I doubt the younger employee will see that though.
So point being, there are standing reasons why salaries are kept unmentioned. Employees would love to have this data, but what are the reasons why employers should want to open this up?
I think it is fine in theory but the reality is, everyone who feels they deserve more money – regardless if they do or not would cause trouble for all the rest.