In this week's Balancing Act column in The Miami Herald, Cindy Krischer Goodman quotes me and others in her examination of fair pay legislation. One of her key points: That salary secrecy contributes to pay discrimination. She quotes financial analyst Suze Orman who is a big proponent of open discussion of salaries and who believes that access to salary information would empower and protect employees.
It sounds good in theory, I admit. I don't believe it would work out quite so smoothly or easily in real life practice, however. John Hollon, Editor at Workforce Management/author of The Business of Management blog, and I had a recent exchange on this topic, which he posts on here. I find myself agreeing with John's take (as a longtime manager) on the issue, which is "nobody wins when workers know what everybody else makes."
One of the biggest problems with this "transparency doctrine" is that comparing salaries and drawing conclusions about their fairness requires a measure of independence and objectivity. I have had many, many one-on-one conversations with employees about their pay over the course of my compensation career, and this experience has convinced me of a basic truth: We simply cannot be completely objective about the value of our jobs and the work we perform. Nor can we be completely objective when comparing our jobs, our work and our pay to others. Can you say inherent conflict of interest?
Somebody would need to convince me of how the positive consequences of open access to salary information would outweigh the potential negatives - as John puts it, "bad feelings, bad blood and bad karma."
What's more, employees themselves hold a bit of a double standard in this regard. According to recent research by Ceridian, while 46% of employees are interested in learning the salaries of colleagues, 89% are reluctant to have their own salary information shared with those colleagues. That tells me that there is a privacy issue at stake as well.
I don't mean to get employers off the hook for transparency, though. While I am not in favor of sharing the what (employees make), I am a big proponent of sharing the how and the why:
The How is about the mechanics of pay in your organization; how jobs are valued, how increases are determined, etc.
- The Why is about your organization's pay strategy, the objectives management is seeking to achieve and the rationale underlying the pay program. This includes questions like how the organization defines its competitive market for talent and the way in which performance influences an employee's pay.
To empower employees, to assure them that they are being treated fairly and to make clear the standards to which they should hold us accountable in that fair pay treatment, we must provide them with the information they need to put their pay situation in as objective a context as possible. As I've said before, without this proactive communication employees are left with no choice but to draw their own conclusions about the organization's intent and practices.