Should companies be open about how much each of their employees is paid? That is, should every employee know how much every other employee earns? The blog entry below casts transparency as a means of building trust, and also as a way of making it harder for employers to hide disparities rooted in sex or race. But there’s no mention of the downsides of transparency, such as the fact that it may violate privacy rights, or the fact that it can contribute to “ratcheting up” salaries. >>>
LINK: Why Companies Should Make Their Pay Transparent (by Jennifer Deal for WSJ)
…leaders have a choice: Be open about pay, or leave a pay-information vacuum that staff will want to – and can – fill. Distrust is toxic within organizations, and employers who choose to hide information about compensation run the risk of staff thinking they are being deceptive – or worse. When people are believed to be hiding something, it makes others wonder what they’re hiding and want to investigate further. Recently some organizations have been perceived as discouraging staff from sharing information about pay, which actually caused even more staff to share pay information, and many to come to the conclusion that the leaders of the organization were trying to hide unfair compensation practices.
Leaders who choose salary transparency reap the benefits of everyone at the organization having a clear understanding of what the compensation situation is, and not feeling as if the organization is trying to hide something, which increases trust….
What do you think?