This guest post is by Fredrick Cameron, whose work I have published three other times. This time he offered an interesting post about pay transparency. Before I decided to publish this one I asked how people felt about pay transparency to an HR group to which I belong. I have posted some of the comments to my question at the end of Cameron’s post.
Employees want a company to be fair. And most recently, “salary transparency” has become a heated debate in the industry. Salary transparency— as in all salaries of every employee will be transparent and is available for everyone to see.
While discrimination at work still persists in the workspace, businesses and companies do everything they can to ensure to avoid it and to provide transparency among employee salaries.
Broadcasting Salary on Company Website
Often times, websites of businesses and companies are built to be used for showing off and advertising their products and services as well as promotional discounts and packages. However, because of the rising employee demand for transparency, there are some companies using their own company website to show or broadcast to everyone their employees’ salaries.
Although this is not yet a common method of providing salary transparency, it is being used by some companies. Buffer, for instance, is one of those companies that put all of its salaries on the website for everyone to see.
However, like anything else, broadcasting salary on the company website has its own pros and cons.
Pros of Broadcasting Salary on the Company Website
Boosts employee satisfaction
Transparency in salary can provide employees with the reassurance that they are indeed being treated fairly in relation to their co-workers. And if they sat down and can openly discuss their salaries and get an explanation for their wages, it will surely erase the doubts in their mind. They can now work and focus more and will have a greater job satisfaction than usual.
Allows discussion of salary
You cannot improve the wage gap or increase your own salary if you can’t even talk about it with your employer. Broadcasting salary can invite people to take a look over their salary, compare it with other co-workers and encourage to have a discussion about it. And once it is no longer a taboo, people can then start fixing wage inequalities.
Clears up any doubts and suspicion about being underpaid
When an employee saw another employee with the same position is being paid more, then they can confidently bring it up to their supervisors. Without transparency of salaries, employees will never know if they are not getting a fair deal.
If there is a reason as to why that certain employee is being paid more, then the supervisor can always explain the case. If employees know why they are paid being paid a certain salary, then it can clear up any suspicion and doubts of being underpaid or having favoritism and others.
Everyone wants a better salary. So when there is a salary transparency, lower paid employees will see and strive to be more productive in order to get a higher wage. By broadcasting salary, employees can talk to their supervisor or boss about how they can improve and move higher ranks for a better salary.
Cons of Broadcasting Salary on the Company Website
And while broadcasting salary to company websites seems like a good idea, it does have some negative effects that also need to be considered.
Employees might feel embarrassed
If a company has operated with a confidential salary for a long time, then suddenly switching to a transparent salary system can be too embarrassing and shocking for current employees. Before revealing salaries, employees need to adjust first or else arguments over disparate salaries can rise.
Broadcasting salary tends to take more time discussing salary than those who keep it confidential. While it encourages discussion, broadcasting salary also means that the company also needs to take more time than usual to talk about each employee salary.
Can give rise to issues
If salaries are not consistent and fair, disclosing them can anger employees as well as lawsuits. Also, if other employees find that their pay is below the market wage, then it could significantly reduce their morale and even quit their jobs.
When thinking about implementing salary transparency on your company website, it is better to think things through and see if it fits your company’s culture. However, if you choose to go with broadcasting salary on your website, be sure that the website design company you choose will ensure confidentiality and security of your employee’s company information from the outside world.
It will raise so many questions, which I would venture 95% of employers aren’t prepared to answer. Because most employers have little rhyme or reason to their compensation decisions. And their individual decisions culminate in a hot mess of racial and gender bias in the aggregate. So unless they are ready to fix it, why bother sharing?
I have known companies that did this. Some felt it was a great way to short-circuit the gossip about what people got how much money and some (the Whole Foods example for instance) have been successful. I would NOT suggest doing it until the management team reviewed all compensation and was very clear about why each position earned the pay range established for it. There will be many questions so getting in front of it first is imperative. On the other hand, I have seen companies get into a continual battle about relative pay when it was not done with considerable thought and actual practice explaining it to those who will question. Role play those conversations first!
I just don’t see any upside at all. The concern I see goes beyond those in the same job title. It actually seems worse for those in different positions. The problem is that employee A doesn’t really know what employee B does…they just know that they don’t really like employee B and he or she seems to them like they don’t do much. Or maybe employee C is doing a fantastic job that her manager is well aware of but her colleagues are not. Nobody knows what a person is really doing and their performance except their manager. It’s not healthy for employees to be able to peruse and see how much everyone is making. Companies of any size are still very high-school-ish in nature in terms of human dynamics and seeing each other’s salaries just furthers that. Makes you feel bad about your colleagues and about your manager for paying you less.
We had it at a consulting company I worked for. It was… high maintenance. GREAT in theory but in reality the owner saw himself as the Emperor of Pay and used it to flagrantly reward those in his favor. I think he started out with the right idea but over time it became a shortcut to managing and communicating more effectively.
Being in the public sector, this is already a reality for me and does prompt me to be certain about any and all pay practices we have in place whether they are collectively bargained or not.
If you wish to weigh-in on your experience with pay transparency please comment below.