Would you do your job differently if everyone in your company knew your salary?
Workplace transparency is a term that has been popping up in corporate leadership conversations with increasing frequency. It has recently gained steam as more and more companies are adopting open floor plans; and CEOs are taking a page from Zappos CEO, Tony Hsieh’s, book and taking up residence in a cubicle instead of the traditional corner office. If you ask most employees, they tend to agree that workplace transparency is key to their continued success as an employee and overall satisfaction at work.
But what does transparency mean exactly? People don’t like to be kept in the dark about anything, but are there times when not pulling back the curtain is a good idea?
Recently, I was listening to a podcast with David Burkus, an Associate Professor of Management at Oral Roberts University and author of the book, Under New Management, How Leading Organizations are Upending Business as Usual. In his book, he talks about a concept he calls “salary transparency.” This was a new concept to me and one that I have simply been unable to let go of since I heard about it.
Let me start by saying salary transparency goes against nearly every bone in my professional body. I was brought up to believe that it was impolite to ask or even to know what other people’s paychecks look like. But research over the last couple of years on the subject of salary transparency has identified a significant relationship between employee engagement and satisfaction and pay.
A 2015 study conducted by PayScale surveyed more than 70,000 workers and found that two-thirds of the employees surveyed who were paid AT market rate still believed they were underpaid. The study also found that “open and honest discussion around pay was found to be more important than typical measures of employee engagement, such as career advancement opportunities, employer appreciation and future enthusiasm for the company” (access the full study at http://bit.ly/PayscaleSurvey15).
I have never worked for an organization with salary transparency and since I never have, I don’t know if I am better or worse off because of it. My husband works for a public university where all salaries are pinned in at specific levels — all of which are public. If you are a professor who has been with the university for five years, everyone knows what you make and that’s just the way it is. No negotiation. No discussion. The salary ranges are completely transparent, and yet it is one of the premier research institutions in our nation and all hell has not broken lose over this approach.
There are plenty of reasons to keep salaries private and it is still the most common approach in businesses. Perhaps the primary reason for keeping them private is that it allows you to save money on employee compensation. If a new hire states their salary requirement as $10K less than what you were budgeting to offer, salary secrecy seems to be a good idea to trim back the budget. But I challenge you to think about the longer term impact of that. If two-thirds of employees who are making market rate still feel underpaid when they don’t know what their peers are making, how long will they last as a contributing, engaged member of your team if they are in the dark as to how their paychecks compare?
Make no mistake — I am still not entirely comfortable with salary transparency; however, knowing that it can take on many forms has really given me something to chew on. Whether employers choose to make individual salaries completely public, publicize pay levels within their organization like my husband’s university does, or simply publicize the formula that is used to calculate pay for a company, the simple fact remains that employees are ultimately more engaged and happier if they know how they stack up against others in their organization or others in the same role in the industry.
Kim Garcia is Director of Marketing for PSA Security Network. To request more info about PSA, visit www.securityinfowatch.com/10214742.
