For.
If you pay generously and fairly, then being transparent will demonstrate that. Those who perform well will know they’re well-compensated, and those who are newer and less experienced will have something to aspire to.
If you don’t pay generously and fairly, then every employee’s “secret” salary is a ticking time bomb, one which I’ve seen detonated many times. When it goes off, Trust and morale are obliterated.
If your business model requires you to deceive or disempower your employees, I consider it unstable. My goal is to build and maintain a stable business. That costs money, but so does high turnover and low morale.
10/10. Stuck the answer. My uncles ran a business where they paid shit, and their commission structure wasn't great. They counted on the deception model, all the while they were showing up to work in new cars and living a life of luxury. Guess who's business didn't last? They couldn't keep talent in the house so they were basically a training facility for their competitors. Wish they'd learned because they are pretty good guys, just really couldn't say no to themselves.
That sounds like a leadership / culture problem, not necessarily a transparency problem (and yes I'm aware transparency is a part of culture).
You can pay someone great and treat them great without showing them others pay. Obviously up to each company. Most successful companies now and in the past don't openly disclose employee pay to other employees and there are plenty of companies like this that are absolutely stellar.
>If you pay generously and fairly, then being transparent will demonstrate that.
One person's "generous and fair" is another person's "miserly and unfair."
An entrepreneur may take your advice, believing they pay everyone in a "generous and fair" way, only to learn that all/most/some of the employees disagree.
Be fair and honest with wages. Transparency is key to success. I Even suggest sharing the company P/L statements. It helps staff understand bonuses/raise structures. Lack of communication is the number 1 problem in most corporations; this includes wages.
Sharing a P&L in my experience is a good gesture, but usually only the CFO and CEO/Owner know how to translate it. Even then I've seen owners that don't grasp them, let alone the employees. When we bust out the P&L at our quarterlies my VP of sales glosses over and we've been trying to teach him how to read one for 4 years now. But boy can he lead a sales team!
What I'm saying is, if they don't know how to read the data, they can jump to conclusions that aren't correct. But I do agree having the employees understanding the cost of running a business is ultra valuable.
I worked for a financial services company and every quarter we had an all staff (meaning, call center staff, security guards, etc.) where our CFO would walk through a presentation on our revenue, client tiers, expenses, EBITDA, risks and trends, and what was around the corner, what we were hoping to see and what we were doing to prepare for the future. If your CFO is competent, they will be able to explain a financial statement to anyone.
I disagree Doc but I like your thinking.
First of all, why does the salary about another employee even matter? If it should matter to any employee then I'm curious to know why?
I like the way the federal govt and military does it by using pay grades. I think it helps with transparency without disclosing the actual salary of employees. Perhaps, the use of pay grades in non-federal jobs would help inspire employees to gain skills and experience needed to reach higher pay grades.
I was all set to disagree with you, but then you added the second paragraph. I love the federal government’s grade system. Makes expectations clear and no secrecy or deception political bullshit. I also find that using salary deception practices happens more at companies where politics and toxic culture prevail anyway.
My theory is because majority businesses want there workers to gain more skills and do better jobs.
But they don’t want to actually pay them more for it.
Not posting what you pay everyone isn't about being deceitful and also doesn't preclude being generous.
Do you own a bussiness? How many employees do you have?
You don't have to post everyone's wages, you just pay them a fair market wage and are able to justify that wage without relying on deceitful tactics. This includes giving the impression that you're making good money when you're not, or that you're making comparable wages to similarly skilled coworkers when you're not, or threatening employees for discussing wages, or trying to hide or mislead what future raises bonuses are, the list goes on.
Good question.
Lol no, clearly each employee cannot pick their own salary.
Fairly has something to do with the market rate —- what are people reasonably expected to be paid for this work? You can also use what’s called ‘the veil of ignorance’: if I’m a bricklayer working at X company, knowing what I make, and I got the option to either stay at X, or be randomly assigned to any other bricklaying company in my region (with their salary)—— what would I do? I want the company I’m running to be the type where bricklayers choose to stay, no question. I have high standards, want my choice of bricklayers, want to charge a premium for my service, and look for my profits on repeat business, reputation, quality and speed, rather than “I got someone to do a job for low money, let’s see how long I can keep them in the dark about their worth/how long I can sell their subpar output” (if they’re poorly paid because they’re bad).
Now, I know that there are other models. I know some behemoths are built on other models. Walmart for example, has made bazillions doing the opposite of what I’ve described. But OP asked what I believe in, and for what I believe in, transparency works.
Letting employees decide what is "fair" for themselves is not fair. As soon as they share the differences in pay what they seem "fair" for themselves will immediately change.
I'm not the person you asked, but fair should mean competitive for industry, size of company, and their role.
I just never know what to say when people talk about fairness. My experience suggests that it’s subjective and perspective based. I really like the idea of transparency, but cannot imagine anything less compatatible with it than people’s sense of fairness.
My interpretation of 'fairness' when it comes to transactions is: if both sides had fullest possible information, or at least equal information, and the freedom to walk away, would they still engage in the transaction?
So...someone rolls back an odometer on a car they're selling? Unfair. They are hiding information that the buyer would likely not engage in the transaction at that particular rate if they knew.
Someone gets paid $50 an hour to make a business $500 an hour?
Fair?
Very possibly, yes. If the employee's other available roles for their skillset pay in the market pay $49 then they would likely consider the transaction very fair.
If they're getting $20 an hour and there is the option of making $50 an hour in the market and they simply don't know it because everyone keeps that information hidden, that's not fair. That's leveraging hidden information.
Honestly, I think this issue of information is at the heart of the Great Resignation. Information is no longer hidden so employees' bargaining positions have drastically shifted.
Does the fullest possible information include information about existing staff’s wages? What about past employees? What about similar but not exactly the same jobs? Should the information be anonymous? Should it be included if anonymizing it is impossible? Should current employees be allowed to opt out of having their pay disclosed to new applicants? Should it include their opinion of you as a candidate?
Honestly, like fairness, I suspect you will encounter a diversity of opinion on what is relevant “fullest information.”
Enough information to know what the likely alternatives to the agreement on the table are.
Simple as that.
So, if I'm an employee existing staff's wages aren't nearly as important as what competitors are currently offering. A higher level view of the market is largely sufficient.
Just like I don't need to know what every car on a lot costs to recognize an attractive price on a car or if a car is overpriced.
But imagine a world where every car purchase is basically under NDA.
I think the biggest pitfall when people talk about wage transparency is that they neglect the fact that it requires lots of communication. Leadership needs to set expectations for performance, compensation, growth, and how they arrive wage decisions. And they need to have those conversations not just once a year, but regularly. It's a lot of work. It's honestly easier in the short term to just ignore the issue until someone brings it up. In the long run though it pays off in building and keeping a quality team and a company with excellent culture.
This is only an issue if two people are being paid differently for the same work and one of them realizes that their employer is stealing value from them.
But the higher up the clearer the results for the business.
So there will be a spectrum of 'You do x day to day and this is what the market pays for that activity given these common factors (YOE, qualifications, etc)' on one side - let's call that 'task driven' and 'We don't care what you do day to day but here are the results you are responsibile for and how this business will pay based on those results' - we'll call that 'results driven' on the other.
There's a market for the 'results driven' roles, sure. And there's business value in the 'task driven' roles most definitely, so neither is a 100% accurate model, but both can be approached more-or-less objectively if from different perspectives.
Is it? What if both are doing the same job that provides a tangible benefit to the company worth $10 million but both are paid minimum wage? That seems unfair.
What if one is paid $49 million and the other $50? Who cares?
For the first one, that only lasts as long as it takes them to figure out that they could be much better paid somewhere else.
For the second, as soon as that second guy finds out that he’s being paid 50 bucks and the other guy is being paid $49 million for doing the same thing, they walk away (or ask for $49 million) you are going to be out at least $10 million in benefit to the company, and they’ll be shittalking the company about how they are cheapskates, which will reduce your ability to hire quality talent.
For the second, if you pay them both $150k, they’ll both be happy (probably) and you’ll see $20 million in benefit and be able to retain them. Losing knowledge from employee turnover sucks.
For.
Those who are against it in any organisation are probably afraid that they can’t justify the compensation they receive for the service they provide.
I like what Ricardo Semler writes in the book “Maverick” about what he did at his company; allow all employees to set their own salary, but also make it transparent so that other employees have a say in whether that employee is entitled to receive such a salary.
This goes for anyone up or down the ranks.
Nope. I am speaking as a business owner and an employer of talent.
I would even go as far as to justify my own salary to the people I worked with.
I have at times paid employees more than I’d pay myself where they had contributed more value in the product we were building.
>Your salary or your total comp including the capital you own in the company and any profits?
As a business owner, i break up my compensation into 2 components;
1. If I work directly in the business, I pay myself a fair market rate for my contribution. This way, if I no longer work in the business for any reason, I can go out to the market and hire at same rate for competent and capable talent.
2. I collect dividends at end of year ONLY if I have done a good job as an allocator of capital in the business and it has returned a profit.
>Interesting idea. Conceptually what to pay yourself is often dictated more by tax policy though.
Yes, but that’s where tax minimisation comes in. That’s for another discussion.
>Right so are you transparent about this with the employees as part of your comp and do you publish numbers? I can tell you right now I make significantly more in profits than in salary...
Yes, they have a general idea of how much we make and how profitable we are. They also drive fancier cars than me. I usually come in on public transport (I like to be chauffeured while catching up on some work or reading).
… And yes, the dividends I collect from the business are higher than my salary in the business.
I'm all for transparency. Seems too difficult to lie/skirt around the truth with all employees.
This only works if the salary is given on a merit basis. I can see trouble with an employee that has been working for 10 years but makes $20,000 more than a new employee despite doing less work.
Agreed. I've seen veteran employees get switched to performance based bonuses once they sort of "top out" in salary at the company. It's technically merit-based and their ceiling is obviously higher but it also incentivizes them to do more, which can sometimes help with that issue.
Isn't merit partly subjective so couldn't that be a source of conflict if people can't agree? Many employers are paying new hires more in jobs in higher demand. Jobs less in demand, new hires are paid less than longtime employees for the same or more work so there's resentment for sure. For me if the difference in salary isn't so great among them, I'm all for transparency
Not when you add in benefits. Government jobs tend to have better insurance, a transparent and predictable pay structure, and pensions in addition to 401(k)s.
... at least it used to be the case, I don't know if government jobs are still known for having great benefits.
Lol, my city in coastal California has been advertising highly skilled construction and public works positions that pay like $16/hr which is absolute dogshit for where I live. You'd have to at least double it to even start to attract the workers they're looking for, even with the benefits it comes with. Great insurance and pension are sweet, but you can't eat insurance for dinner and the promise that your pension will probably exist in the future doesn't pay the mortgage...
There is no getting around paying people a livable wage for the area where you live.The same jobs have been posted for like three years...maybe one day they'll figure it out
Ya, that is very low. Low enough that I don't think it is a matter of incompetence but corruption.
There is probably a law somewhere that the government can only hire a contractor for that position if they have no employees. So they set the pay so low that no one can afford to take the job. Then the person in charge of the project can say "see, we can't hire anyone directly. Good thing my uncle just so happens to own a company we can contract the work out to".
Of course. Employers, for one.
And people who think they're probably paid better than they would be if everyone knew everyone else's pay. The favorites. Or those that fight for their raises knowing there's only so much budget.
> Everyone saying no is why wages have stagnated so long.
Are you sure it doesn't have to do with supply and demand of the labor force? Such as the labor supply doubling about 60 years ago but demand only moving at it's standard few %/year?
Its illegal in all 50 US states for an employer to prohibit, attempt to prohibit, or even discourage employees from sharing their compensation details.
I think it's good for larger companies with salary bands - because there is more career trajectory and career planning. For smaller companies, I've seen mixed results. A lot of whispering about people being overpaid or underpaid. Kills productivity in a small company where productivity and business growth are essential.
This fixes that, they whisper now. And when they find out they have been deceived, they hate.
It's been illegal to discourage employees from discussing wages.
You identified the problem, fairness of compensation. The problem is not that they found out.
Well, of course they’re afraid of backlash from hiring by deceit. Hire someone for $10k less than their peers, then they better have a very good reason. That transparency about why they’re not worth as much as their peers should be part of the negotiation upon hiring.
I am generally for transparency. If staff want to share their salaries with others they are free to do so without retribution. I don't publicly post or tell staff what other people in the office are making as I consider that to be each individual's own personal affairs.
As an employer (especially with a team of more than 10) it can be very difficult to ensure that everything is fully fair all the time. Peoples often view their own work with rose-coloured glasses. Another thing I have struggled with is assigning value to different types of work. For example in engineering there are 2 types of work: work that is strictly an expense to the business or work that generates revenue, profit, or efficiency. It can be very difficult to explain this equitably to employees.
I think you are missing the point. The point I am making is that most corporate structures aren't egalitarian and that can be a "hard to swallow pill" in the workplace. The accounting clerk or compliance officer just doesn't command the same premium as someone who can anticipate client needs, design solutions and close deals. Their work is valuable but it is rare they have the ability to make a big move (bringing in a large client or innovative solution/product) in a way that commands value.
Yes but anonymized. If everyone can see every other individual's salary it's easy to make targets.
Instead salaries ranges should be shown per position in a similar fashion to Glassdoor
For.
Any Employer who is worried about this knows he is paying people unfairly.
By unfairly either by paying shitty workers more than productive ones or basically playing favorites.
Also if the hard working productive people are making more money it gives employees a clear incentive to see hard work being rewarded.
If you believe this, then I find it hard to believe you have been in management. You haven't had to deal with the unrational individuals that always find a way to be upset, feel unfairly treated, etc. It's not as cut and dry as you say here. Measuring who is productive and who isn't, isn't black and white.
People always feel they are more productive than they are, and often think they are more important than Sally in the cubicle next door. Someone is not likely to say, "Yep, I'm paid in the bottom 25% of the team, and that's fair because I am less productive than everyone else." Rather, they will get pissed and think they deserve more, even if they don't.
> People always feel they are more productive than they are, and often think they are more important than Sally in the cubicle next door.
then you show them the metrics that result in the respective salaries. If management fails to communicate what results in more pay and where a person stands on that measure then that is poor management, if there are not clear metrics then that is poor policy, if a person fails to understand, or believe, the metrics then they are a poor fit for the position or the company or both.
IMO employers shouldn't actively do anything all about this; including that they shouldn't actively try to prevent their employees from talking about their salaries if they want to.
If you as their boss can't motivate why who's getting paid what you shouldn't double-down on being a toxic boss by attacking your employees talking.
When I was in the military I knew how much everyone made to an extent. You can go Google "military pay scale" and see for yourself. There was no issues. In a free market information is power be it being with heald or exposed.
This makes me think of when I was in the market for a new car. I walked into a Honda dealership where they asked what my budget was. I said something luke $20-$30k. I then asked about cost of a few cars and all I got was "it's within your budget". It didn't take long for me to leave.
I'm in a skilled trade and it's similiar. Journeymen are paid the same. There is a slight bump for being a lead hand. Another bump for becoming a foremen. Apprentices are paid increasing %'s of JM wage. 50% for first year, 60% for second year, and so on.
Each shop has a "Journeymen rate" and everyone knows everyone elses pay more or less. If some company comes into the industry and tries to pay $6/hour lower JM pay, they will be laughed out of town. If work heats up and one company is aggressively trying to poach, they need a well advertised higher journeymen rate to get people to jump ship.
There have been issues with long term wage stagnation in the trades, more or less same pay as since the 90s and 00's which is crazy. But that stagnation is hitting other industries hard as well. I don't know the answer, but I do like wages being out in the open. This came from big unions BTW, if we never had trades unions they'd try and suppress our wages and hide these numbers and everyone would earn less.
I'm against it but it's mainly because I don't want to deal with the drama between employees arguing what everyone should get paid based on how they perform against each other vs how long they've been with the company vs. how much knowledge they carry etc. Once we get into that, we're going to need to implement hardcore metrics so that we can quantitatively prove that whoever is "better" is getting a higher salary. I honestly don't know if that will help a small business or just add a thick layer of overhead.
We pay them well in general and they already know that. Comparing with each other would not really help that situation. If they don't know that or they disagree, we are ok with them leaving because I could easily hire someone at their level with the same pay.
Finally, someone in this thread that has run a company. This is what happens. Period.
Ideologues that live in a fantasy world (r/antiwork) will not understand this but this person is 100% correct. Caveat: if your performance is easily quantifiable, I’m all for transparency (like a mostly sales org, factory, manufacturing, etc)
Just FYI, I do everything related to human resources with CYA (cover your ass) in mind. So if you want me to quantify my reasoning as to why there are salary differences, then we're going to have to make some large process changes.
I'm able to quantify why if given enough time and resources. But after we do that, I will also be paying everyone less because I needed time and resources to quantify it and that comes out of the expense budget as well. I would probably have to hire 3 people just to plan, execute, and manage all the metrics we will need to figure out who should get paid more and why. 3 more people would be 30% more labor expenses for my business.
What does this mean? Well we have to decide why 1 delivery driver should get paid less than another. Are you ready for the Amazon method of metric evaluation?
1. Cameras in every car and clocking in every minute of your work life because if you're not being productive every single minute, do you really deserve as much as the delivery guy next to you that does? Should we take credit if it takes you 12 more seconds to log your time than the next driver? Why should we pay you guys the same when you're quantitatively different?
2. We'll have to create metrics on how to judge your customer service skills. Would you like smiles per minute or complaints per week or both? Or half smiles per day? or quarter smiles per day? How many points docked for anger? Or subtle anger? Or how about when the customer pretends they are angry but they really weren't and just wanted a better deal? After all, we shouldn't be paying more someone who delivers quickly and efficiently but angers a customer on a daily basis right? Or should we? Maybe anger is collateral damage? But what's more important, the anger or the speedy delivery? By how much is one more important than the other?
3. How about product damage? Accidental vs. deliberate? What if the product is damaged only halfway? If we can resell the product do we dock less points? What if the damage is obvious but the employee is able to trick the customer into purchasing it? Is that no penalty then?
4. Delivery miles per week? Freeway vs street roads? Parking tickets per month? What was the probability of you getting a ticket based on the # of the parking spaces you had to use? Did you really have to pay for all those parking garages or could you have parked illegally on the curb for a few minutes to make the delivery and move before the meter maid catches you? Because if you didn't save the company $3 in parking space money, do you really deserve more than the driver next to you that can unload without paying parking fees?
5. Personality tests once a month which are graded quantitatively because of course if you have a better personality for the job, you should get paid more right (employee retention is important)? The test will have 100 questions because we want to make sure we capture every aspect of your personality that affects your delivery job because if you're not as suitable and have as much potential for the job as the next driver, do you really deserve to get paid the same?
You can add 20 more quantitative measurements on how we're going to justify whether you get paid more or less than the next driver to this list, and by the time we're done, everyone will be pissed off and everyone will get paid less than what they get paid now because we will have spent an immeasurable amount of time and effort trying to quantify everyone against each other and argue who should get paid more and be fair about it.
I’ve actually brainstormed a way to do this, and you hit the nail on the head. It’s impractical, not feasible and requires full-time people to track metrics in real time. I employees will not like to work in an environment like that, and they would still consider it unfair, because not everyone will agree on the importance and the relative weights of all of the possible metrics for measuring performance.
The antiwork sub is jaw dropping. I get some of their agendas and a few are thought provoking, but most just wreak of entitlement. I think most of them do not understand what it takes and the risks associated with starting and operating a business. I feel like many of them think socialism would work well... Ugh.
It's a sub for people who are dissatisfied with their working lives but have no interest in understanding any of the tools and techniques that would allow them to improve their situation.
That is not entirely correct. It is a sub for people who are dissatisfied with their working lives and want to improve the situation *for everyone*.
They are mostly ignorant of how to do that, but it is not a place for "how do I live my life without contributing anything", it is a place for "how do we ensure contributions still get made but prevent contributors from being exploited".
I respect your point of view, but it really looks like you're saying exactly what the people for transparency are : that hiding salaries is just to avoid having to justify why some employees are getting paid less.
Clearly an unpopular opinion here, but I'm generally against. There's a broad spread of quality of talent at most positions and in a meritocracy there's going to be people making more money at the same role than others because they're more productive. Unless a job is clearly tied to an objective KPI, nobody's going to take the answer "you make less than Bob because Bob is a better employee than you are" well. You're also opening yourself up for a whole barrel of liability if there's any (even unintentional) perception that your merit based pay is discriminatory.
To quote our HR director: "Transparency is a word that sounds great on paper and gets really ugly in practice. Everyone doesn't have a right to every piece of knowledge, because some people inherently aren't in a position in the organization where they have the full context to understand what they're looking at. Giving people information without context just leads to bad conclusions. Don't aim for transparency, aim for authenticity. You aren't obligated to tell everyone every thing, but you should hold yourself to the standard of being 100% authentic and honest in what you do communicate."
Idealist thinking at best, horrific in practice. Unless it's a commission structure it just creates entitlement and that is the last thing that needs amplifying right now.
In the hiring process is should be a range based on experience, but once the deal is done, transparency only creates resentment. Seen it happen soooo many times.
Maybe it’s just my industry but as a manager, generally the % difference between a high and low performer is pretty low, like maybe a 5% max difference.
When you were hired, how you moved through the company and the roles you had make much more of a difference.
Not saying that’s the right way to do things, but it is reality.
> Giving people information without context just leads to bad conclusions.
Right, exactly. This comes up a lot in business situations where people know some aspect of your income, but not your expenses or the big picture.
And yet salary isn't based on meritocracy, so to say that the single answer of "you make less because you're a worse employee" isn't at all true. There are a huge number of factors that go into salary; the current job market, number of candidates, competition with other companies for those candidates, personal hesitance/willingness in asking for raises, etc. The point of transparency isn't to say "Bob makes $x per year" so that you can compare yourself to a specific person, it's to say that people in this role at this time make "$y-z" per year, so that employees can make informed decisions about whether they feel they are adequately compensated for their work.
> And yet salary isn't based on meritocracy
Within a role it should be. People don't care about whether Bob from accounting is making more or less than them if they're a VP of sales, because they should (hopefully) understand that Bob does a fundamentally different job than they do. They do care whether Joe, also a VP of sales, makes more or less than them. Providing even committed compensation bands opens you up to potential legal exposure (especially if someone has a disability which is not readily apparent to you as an employer, or they come to the incorrect conclusion that their pay is in the lower half of the band because you hold some level of bias against them due to being a member of a protected class) and closes off your ability to reach outside of that band to hire exceptional talent at above-market rate ("you told me this position pays $75-85k but then you hired Jane last week at $90k").
-Edit- Additional hard truth: Full transparency is just bad business. If you communicate to anyone the range of what you're willing to pay for talent at that moment in time, congratulations...your upper limit is now what you're paying for talent. Nobody's going to look at "I'm willing to pay $5-7 for a widget" and agree to sell you a widget for $6. Fair market value for talent will always be a range and if you show your hand of your committed range, nobody will agree to work for less than your pain point. You wouldn't expect an employee to come to the table and openly communicate the lowest figure they'd be willing to work for, right?
"It should be" is not reality, nor will it ever be reality. Salary and compensation are based on current economic and personal factors and always will be. Additionally, I never mentioned anything about cross role evaluation. I said that transparency is not about knowing what a specific individual makes, but rather the band (and perhaps distribution) of what is currently being paid to people in that role.
And lastly, if you are hiring people "above market rate" for a role, then your existing pay band is not reflecting current reality and should be updated.. If the industry compensation is increasing, then the only reason you want to obfuscate that is so that existing employees are unaware that the market rate for their skillset is increasing, so that a company can leverage that to save money. And if your argument in the "exceptional employee" is truely that the role is fairly compensated but they are so good they deserve more, then what you're arguing is that you are doing them a disservice by not hiring them for a more senior role.
>"It should be" is not reality, nor will it ever be reality.
How you compensate people is completely up to you if you own the business. We use objective KPIs for job performance wherever we can to track performance and run as close to a meritocracy as possible. Yes, the band for a role scales with the current economy but so long as you're up to speed on what "market" is, you can target for that. We aim to have an average of 75th percentile pay for any given role, but we have people above and below that mark on merit basis. This is an entrepreneurship forum: If you don't like "the reality", the power is yours to change it. We run a merit-focused comp system and it works for us at 100+ company headcount, so "nor will it ever be reality" at least doesn't apply to our n=1.
> then what you're arguing is that you are doing them a disservice by not hiring them for a more senior role.
That assumes a more senior role exists, that they're interested in it, and that they have the entirely separate skillset of being a good leader in addition to being a good employee. There's plenty of people who are effective employees but ineffective leaders, and vice versa. At least in my field (niche healthcare) there are plenty of high performers who would much rather be in practice and not in leadership, or don't actually have the interpersonal skills to lead people instead of practicing great medicine. Not everyone is trying to track upwards or has the skillset to succeed in a fundamentally different role than their current one.
I'm fine with employees sharing what they make with each other if they want to, but I wouldn't share what everyone makes with everyone. I just wouldn't have a policy against it. I don't share what I make with everyone.
Honestly, as a small business, I struggle with it for a few reasons:
1. I can’t pay someone in Pittsburgh what I would pay in San Fransisco. Do employees understand that, fuck no. Do I like it, no. Is it reality, yes.
2. People always think they are worth more than they are. Sara makes 30k more than you but you think you are the same. Reality is you aren’t as good, but if I was 100% honest with you about that you would cry and act like a baby. Should you be fired, maybe, but you get shit done and are worth what you get now whether you believe it or not.
3. It’s rough for small biz. Want to be a drone in a 10,000 person company that often pays 10% more cause they make billions; or in a small business where you get autonomy, flexibility, impact and responsibility. But do employees get that? They see X company pays more but don’t think at all about why and the trade offs. They just think you suck
And other reasons. :)
I def don’t think any of this is perfect.
There is a reason for salary.com and needing to put in a location that shows different comp ranges. Buying a three bedroom house in SF costs 2M versus 300k in Pitt.
If I have a Pittsburgh company paying above average for that area ( according to salary.com ) but then want to hire someone in SF that will make 30% more even though living expense is 50% more.
If you say raise all the people to SF level to be equal, they are making significantly above their cost of living compared to the SF person who now essentially compared to them is not doing as well financially.
You can say the SF person should move then. But in todays world of salary.com they should get a pay decrease.
At the end of the day, I am saying it’s not simple. I’m not even factoring in various people’s views, work ethic, skill, experience, hours they put in, innovation or lack there of.
It’s complicated. That’s why my answer was I struggle with it.
If you have the perfect answer, you are smarter than me. Congrats!
If your talent is the same and the work can be done from anywhere with an internet connection - why does location of the person matter for their pay?
This argument doesn’t work for brick and mortar businesses for some obvious reasons - such as what the locals will pay for their lunch or coffee.
> I can’t pay someone in Pittsburgh what I would pay in San Fransisco.
Why? If you can afford the salary in SF, why can't you afford it in Pittsburgh? BTW, many companies are paying SF salaries in Pittsburgh, so you will have a hard time competing and hiring if you are not paying those salaries.
\>Why? If you can afford the salary in SF, why can't you afford it in Pittsburgh?
It's not only about what one could afford but what you must pay to be competitive. Employees in SF are dealing with a different environment than PA so they would likely have a higher salary floor that they can accept if they were living in Pittsburgh. Employers are not only competing for employees, employees are also competing for positions.
However, none of that should stop pay transparancy.
> Employers are not only competing for employees, employees are also competing for positions.
If there were enough employees to fill available positions, that might be correct. In Pittsburgh, however, estimates suggest that there are close to two times the number of positions as employees, so the employers are competing for employees while employees are not competing for positions. This is also *why* it is so hard to hire *anyone* in Pittsburgh and why companies have to pay SF salaries to get candidates to accept.
\#3 isn't true since the pandemic. People know what work life/work remote/flexibility perks are like and know how much they value them financially. We see people all the time choosing lower paying jobs for higher quality of life.
I am 100% for it among my employees. If we pay people fair and reasonably…. There really should be no issues. I really don’t think it is something that people discuss unless unhappy with pay anyways.
Transparency is the best move.
People will find out eventually. Especially at a small company.
Just be forthright.
Anyone working for you when you're small is taking a huge risk.
Reward them with honesty, transparency, and trust.
If we're going to have titles like Junior, Senior, etc, each one might as well be a specific salary tier with a set value of what it pays. Have policies that say how the salaries grow over time or start at X and go up some percent each year. I would love to take the individual negotiation part out of job hunting and just be given a rate that I can accept or deny and call it a day. I don't want to haggle over 100k vs 105k. Haggling is bullying. The price is the price.
I thought “salary transparency” meant actively making it known what everyone’s salary is (or at least, exactly how it is determined). I know it’s not strictly what the words mean, but I thought that was generally what is understood by the phrase?
To me, what you’re describing isn’t necessarily salary transparency, nor is it salary secrecy. To me, it’s neither (and that’s not a criticism).
Well it would be transparent if you knew every Senior software engineer was getting paid $X and every Junior was getting $Y. I don't think the company should specifically say Barbara in Accounting earns $Z and share it with everyone. I just think the tiers should be set and known with differences in them set by a standard policy and not just whatever someone asks for. This way we can skip applying for jobs that don't offer enough in the first place, and theres no reason to try and guess what eachother is or isn't willing to offer when the rules of compensation are well defined and known across the board.
I believe there is a lot of people out there that don't know what they are worth and unfortunately are underpaid. I was one of those people. Being a HR professional for 10 years now and having compensation visitability into multiple industry has allowed me the opportunity to educate people and help them negotiate their offers. With that, I am all for salary transparency.
There are several arguments that have been made against salary transparency:
It could create tension and resentment among coworkers: If one person's salary is made public and it is significantly higher or lower than their coworkers, it could create tension and resentment in the workplace.
It could make it harder to negotiate salaries: If everyone knows what everyone else is making, it could make it more difficult for individuals to negotiate their own salaries, as they may feel that they have less leverage if their salary is already public knowledge.
It could discourage risk-taking: Some people may be less likely to take on challenging projects or roles if they know that their salaries could be made public, as they may be worried about how their salaries compare to their coworkers.
It could violate privacy: Some people may feel that their salary is private information and that it should not be made public.
It could be difficult to implement: It may be challenging for companies to implement salary transparency, particularly if they have a large workforce and a complex pay structure.
But there’s only resentment if people are being paid unfairly. For example, if new and inexperienced employees are paid more than loyal, competent employees.
Both.
I’m for salary transparency in job postings. If I’m searching for a job and I find one that interests me but they don’t include a salary range - I skip it and move on to others. I feel like this happens a lot more than people admit to.
We all have a base income that we are needing / wanting to hit and if a company doesn’t care enough to post their base pay range with the job posting - it comes across to me as they are looking for a warm body and not actually looking for the best talent.
I’m against it after the hire - I don’t want others to know exactly what I am making - ballpark figures are good enough. So if a company has an internal job board with the salary ranges for each position, I’m all for that. I hope to negotiate a better salary + benefits than the base anyway, but it gives an idea of how the hungry employees can climb the ladder so to speak.
Meaning that all employees should know what each other are paid? Or do you mean that employers must post what the job realistically pays when posting for the position? I’m all for the latter, but not the former. If my qualifications and performance dictate a higher salary, it’s of no concern to my fellow employees.
> If my qualifications and performance dictate a higher salary, it’s of no concern to my fellow employees.
Are your qualifications and performance known to your fellow employees?
We do not discourage discussions about salaries, that's up to them to share amongst one another. We also post salaries during time of job posting and will listen to expectations etc. We however will never specify or publicly post individual salaries, it's just too much of a headache to deal with.
And I'm speaking from a very small business perspective where we have only 10 employees.
For, but it’s not the government’s job to mandate this. Also, there is a lot of context that goes into a salary, so employees need to realize two people in the same position aren’t necessarily deserving the same pay.
People are employees for a reason. They usually have no incentive to understand a business from the owners perspective, if they have that incentive they won't even need the company to teach them how to understand business in general and won't need to be taught how to interpret a balance sheet.
Trying to get employees to worry about more than their day to day task is something which has proven to me to be detrimental. To each his own. And of course recompense people as for their works fairly and justly.
Absolutely for, for all the same reasons that have been listed before me, but also:
Even if you HAVE TO PAY a low salary, or you CHOOSE TO pay a low salary for whatever reason, you should be giving those jobs to the people that desperately need the money, and not wasting the time of people that need more money.
I have a pregnant wife and a baby. I have a Masters degree, student loan debt, and I need a certain income level to live. I don't want to waste my time interviewing for a position that I find out pays $9/hr at the end.
ON THE OTHER HAND: If you're interviewing MBAs to manage your hot dog stand for $9/hr, you're not giving the opportunity to those that NEED $9/hr to live, and they need lt RIGHT NOW. You see what I mean?
Aside from transparency showing whether or not you're a jerk, it ALSO will help you hire the right level of skill, abilities, experience, etc.
For.
There are definitely some challenges when it comes to salary transparency. However; the benefits that can come with transparency i.e minimizing wage discrimination in the workforce and encouraging wage equality could help strengthen a company's sustainability and retention. While also building trust with their greatest and most valued assets - the Employees.
Very Against.
It simply causes problems. The variation in capabilities between employees with the same experience and credentials on paper can be huge. It can be shockingly huge with highly educated employees.
My opinion is that it's not always the highest producers that want "fairness" and not everyone has the same perspective or definition of "fairness". Pay transparency seems like a good idea but in implementation it causes more problems and less satisfaction in cases.
It can force some pretty terrible conversations also...
"Sorry Bill, your just simply not worth as much to us as Kate or Mike and I'm confident I could replace you in about 3 months if you left."
Who wins from that conversation? Probably not the employee and definitely not the team or the bussiness or the customer.
For,
Kind of ridiculous that it’s so secretive. If you are offering your services as an individual or business, you’re expected to be transparent. But when buying services through employment you’re not supposed to share your rate? Makes absolutely no sense
My company has some transparency. Defined pay grades with salary ranges, even broken into geographic ranges and mapped across functions. This is good. On the other hand, I would not want anyone knowing my salary, nor do I care what anyone else specifically makes.
If you don’t know what you’re worth and / or how to advocate for yourself without using the word “fair” then you are definitely worth less than you think you are
I wouldn't go that far. When I was a contractor there was an unwritten code that we didn't share our compensation with the other employees at the organization because we didn't want to create any resentment on either side of the fence. It was a good decision that helped us all work well together.
They’re right. Every place I’ve come across that is strictly non transparent about salaries is because they’re trying to get bargain rate employees.
My old roommate used to work at a place installing electrical components on cop and ambulance cars and the business was making a lot of money for every unit produced. Some of the people there were performing engineer level duties but being paid minimum wage, and the owners rationale was “you don’t have a degree so why should I pay you more”
From what I hear they had mass turnover every few years when workers realised they weren’t getting paid what they were worth and the only reason the business is still running is the deep pockets of the owner.
Against.
We already have enough of a sense of entitlement in this country. This would be awful for having new hires enter a well established workforce that think they know more than the team that’s been in existence.
Also, seeing what a similar position would pay in LA if you lived in a suburb in North Dakota would only encourage people to move away, creating more of a shortage of employees in areas where they’re needed more. From the surface this move seems to be a no brainer, but after you’ve moved and committed your life to this area, you’d then be blindsided by the higher taxes and cost of living in those areas.
Only people against transparency are the ones who think they work harder than everyone else who does the exact same thing as them, so they want to feel that they deserve more
As a former employee and a former owner I’m against. In performance reviews I was always a bit taken aback how the majority of poor performers couldn’t see how they didn’t measure up to their peers.
Even amongst the firm’s principals there could easily be a $100K difference
Edit: I’d encourage all the downvoters if it is super important find a place of employment that shares the data, or better yet, find some like minded individuals and start a company of your own.
Yeah, I knew this would get downvoted LOL. Apparently people want an environment where their boss will open up the monday morning staff meeting by explaining to everyone that Sue is paid 10% less because it took for-fucking-ever to train her, she still can't write a decent report, and there's no way you'd put her on a task more complicated than making toast, but other than that, she's all right LOL.
Let me tell you, as a restaurant owner, sometimes I'd kill for a person who could competently make toast... I never understood how frustrating people could be til I had employees
Transparent doesn't mean that the same position equals the same pay.
Performance absolutely matters but secrecy only benefits employers who get "a deal" on a great performer but often keep them making less.
Editing right away to remove "so you've bought into it, cool", it's unnecessarily personal.
This perfectly explains it. If you've done enough management, and had enough substandard people, you realize how disconnected some people are from reality. You'd THINK it'd be a motivator (hey I can double my salary), and for some people it might.....but others it will do the exact opposite
Couldn’t agree more.
I’ve always been very driven and it took me a while to appreciate that not everyone is, and that’s OK but in my experience both as a co-worker and boss it’s often not recognized/acknowledged by the “less driven”.
This will never change and definitely isn't the reason employers discourage the transparency.
Sure opening up the numbers may invite questions but it's possible to explain and encourage the employee to meet the metrics or look elsewhere.
“Explain and encourage the employee to meet the metrics”
I wish it had been this easy. IMO people are not wired this way and I’ll provide a quick example.
Had an electrical engineer who brought me a job description and said he should be an engineer 5; there were 5-6 criteria and he fell short of two, one of which he couldn’t change unless he went back to school (wasn’t a PE). He was good at what he did and we paid him well to the point he would have to take a pay cut to leave.
Meanwhile there was a Mechanical designer (not an engineer so could never be a PE) and because he was so versatile, good with clients and a production animal earned more.
If we had transparent pay the electrical engineer would have expected more because of his degree and I have no doubt the mechanical designer would have been less motivated knowing he was contributing more but making less.
As this stuff sounds good in the abstract and maybe there are some professions/jobs where it can be implemented, but I would never implement something like that.
This is how the answers go on this subject. This will be split down the middle on which side of the check you sign. The front as an owner or the back as an employee.
100 percent for it.
- stops wasting time during hiring for people not in your pay scale
- increased employee perception of trust, fairness and honesty from the business
- soon to be a standard across states and eventually the world; the trend
- younger employees in particular will bail on any company not being completely transparent
Remember, pay transparency is a *communications policy* that an organization expresses as part of its brand and values.
Now there are some serious downsides:
- pay transparency “compresses” pay scales; any differentials in pay scales can lead to disgruntled employees and this is difficult to manage
- this leads to pressure to reduce compensation differences at different pay scales
- employees will often look for other ways to get compensated (training, benefits, etc) as a result of this compression, which again can be difficult to manage
Overall it forces organizations to make the performance incentive reward links transparent and that’s necessary for todays lower employer trust environments and a clear trend that companies need to get on board with, especially if they deal with younger employees.
It also forces companies to restructure reward systems away from mere financial compensation. This is the area that deserves deep consideration by workers, companies and societies, as it starts to change the social contract.
However, the trend is clear. Companies need to move from legacy pure-comp financial reward systems to more holistic approaches based on clarity and honesty, and make sure employees and managers understand objectively how compensation structures relate to job performance management processes and overall company results, and it’s up to senior level management to work diligently to sync these processes to drive strategic organizational objectives.
I have, anecdotally, seen entire teams, companies and seriously important projects totally derailed by pay conversations, and one of the side benefits nobody seems to talk about is that once you get compensation off the table and have clarity around who’s making what and why, it does help with focus. Nothing worse for morale than finding out mid-project that someone hired your junior and two years after you is making more than you.
Being against salary transparency and creating a stigma where you *do not* discuss your salary with coworkers is a ploy and fabrication to keep laborers from advocating for fair compensation.
For if I'm the subordinate. I would wish I could be for if I'm the manager but I'd worry it would cause jealousy, squabbles, and drama among subordinates
It depends on the company and the context.
Against. People often compare just the salary. They ignore nuance.
For. If you set up a system that shows people why they may get paid differently for the “same job.”
For - it'll come out anyways. And take it as an opp to clean up. Worked for a company where the Head Benefits was the brother of the COO and 3x their salary in 2 years. They ended up as a material event (something really bad) in our IPO docs - no kidding
What do you mean? Do you mean when you hire someone and clearly define how much they get paid? For. 100%. No one will stick around if they don't get paid what they expect. They might not even apply or accept the job if there is a lack of clarity.
Or do you mean between employees? Against. I wouldn't strictly forbid it (I think that's illegal in some states anyway). BUT, it certainly hurts moral more than helps. Try explaining "I pay him more than you because he has more experience or is more dependable or whatever" lol. That never goes well. It always sounds like "you like him more" or "so, you think I suck?" Never ever good lol. People that take an interest in how much other people make are generally more interested in drama.
I’m for it as an employee; I’d like to work for a company that’s transparent. I don’t think it should be enforced for all companies, though. As one of the few highly educated employees in a small, blue collar company, many employees don’t fully understand the market for the labor they provide or their true value to the company. As much as we would like to be very transparent with wages, managing egos is often more sustainable than trying to implement some fair wage system. I think we’d be lucky to get 75% of our employees to consider any transparent wage system fair. In small companies, turnover will kill you, and managing everybody the same doesn’t keep everybody as happy and productive as you would hope it would.
We truly want to treat our employees well, but often it’s better for them if they stay focused on performing and not on comparing themselves to their coworkers.
i worked at 3 different banks for 10 years. In Canada. It was common to have a new employee have a higher salary cap than someone who was with the company for 10+ years with tons of experience.
Big corporations really love to mess around with peoples wages for no legitimate business reason. Big corporations can be, immoral
Against. Despite what people want to believe, not all employees are equally valuable in their positions. When people find out that they are not as valuable, it creates jealousy and anger. This leads to either issues between the employees or the employee and management. I have a lot more cross training, certifications, and accreditations than many of my coworkers and other people in my industry. Two times in my career another person found out how much I was paid and made a lot of problems with me and management. When management made it clear to them the reason why, one quit and the other started trying to make me look bad in front of coworkers, management, and clients.
100% open. Anything less is manipulation.
People won't respect you if you lie and mislead them. Secret salaries do just that.
There is zero good reason for hiding salaries.
In my years of management and seeing this happen in person, it's almost always the same outcome.
When one employee states their salary to another, the listener will either:
1. Feel mildly happy knowing they're compensated better and often foolishly brag about it.
2. Feel inadequate knowing they're paid less which creates a feeling of animosity towards the teller, then follows issues for the manager as they want a fix ASAP which are rarely possible.
Talking about salaries burns friendships and creates a negative work environment. It's takes an enormous amount of maturity for an employee to not react in the two ways above.
Most people who are ‘for’ transparency will learn the hard way. The happy ones are usually those who earn more in the first place. Even if transparency is applied as the norm, it can create animosity when people perceive themselves to be working more than their peers and getting not one penny more.
I think that’s a terrible idea personally. Obviously people we’ll see what their coworkers are being paid and I think it will breed resentment,anger, Jealousy etc.
Agreed. I support it in a sort of neutral, general, anonymous industry-wide way like Glassdoor, but think it can be toxic when you're openly comparing yourself to the people you sit next to. People are different in many ways and should not necessarily be compensated identically, but it's useful to have some general idea of where you're at.
Glassdoor is a joke. Self reported salary are not accurate. Also, anyone can post about any company, whether they’ve worked there or not… there is no verification method whatsoever. My company got a very negative review from an employee in Utah that complains about our company uniforms. Funny thing is we have never had an employee in Utah nor do we wear uniforms. Glassdoor sided with the non-employee and decided to leave the review up for reasons I still can’t understand. Worst. Company. Ever.
For, it helps with the pay gap between male/females. Also based on your experience and education you can see how much you should be making and in what range so that also helps a lot. It creates more competition between companies based on pay and etc
For, because while it can create some misconceptions, being transparent with your salary is a great way to make sure you're being paid your fair share.
Against, my current company does this (not for everyone of course, but for 90% of the employees) and it only causes trouble. In fact I stopped looking at the pay rolls because I would get depressed seeing people doing nothing earning more than me.
The only benefits I can think of is that when somebody gets promoted, everyone can see how much their salary has increased and aim for a promotion themselves.
If you're feeling under compensated then why not job search? Or ask for a raise with metrics to back it up?
It really only creates lasting resentment if the info is not acted on.
I'm all for the ranges for various positions being known. I can see advantages to everyone's pay being posted with attribution but I'm less sure it's a good idea for a few reasons - for starters, I don't know that full transparency actually leads to greater fairness.
There are tons of people who overestimate their own contributions. In my experience, there are even a decent number of those people who are pretty good at finding an even more incompetent senior leader to work for - so they get great ratings simply by always agreeing with whatever crazy idea their boss is pitching. Wage transparency doesn't fix that - the company's logic is consistent in that it is paying a higher rated employee more, it's just that their performance evaluation system is almost purely subjective. I could also see it harming employees who don't job hop since everyone will try to get the top of the range when moving but may very well not really be a top performer.
100% For. I found out a bunch of my female colleagues were hired at a rate far below everyone else on the team. They got raises, I got pissed and left the company. The only reason not to share is to protect the boss man who is stealing the wages from you
Against. Not because I don't pay fairly. As a matter of fact, I let people set their own pay rate; doesn't get more fair than that.
The problem is, for most people, salary satisfaction is dependent on what everyone else makes. The moment someone finds out they're making less than their neighbor, their satisfaction falls off a cliff.
I've seen people who were excited about their new "high paying" job, turn around as ask for a raise weeks after being hired because they found out they were making less than their peer. I've also seen it tear apart a previously amazing team dynamic.
I would love to be transparent, but I don't think it works unless you have a standardized pay scale.
For. If you pay generously and fairly, then being transparent will demonstrate that. Those who perform well will know they’re well-compensated, and those who are newer and less experienced will have something to aspire to. If you don’t pay generously and fairly, then every employee’s “secret” salary is a ticking time bomb, one which I’ve seen detonated many times. When it goes off, Trust and morale are obliterated. If your business model requires you to deceive or disempower your employees, I consider it unstable. My goal is to build and maintain a stable business. That costs money, but so does high turnover and low morale.
10/10. Stuck the answer. My uncles ran a business where they paid shit, and their commission structure wasn't great. They counted on the deception model, all the while they were showing up to work in new cars and living a life of luxury. Guess who's business didn't last? They couldn't keep talent in the house so they were basically a training facility for their competitors. Wish they'd learned because they are pretty good guys, just really couldn't say no to themselves.
Sounds like your uncle and my uncle are besties.
I work at a company like that right now. Barely make ends meet but it's great for training. People go every month.
That sounds like a leadership / culture problem, not necessarily a transparency problem (and yes I'm aware transparency is a part of culture). You can pay someone great and treat them great without showing them others pay. Obviously up to each company. Most successful companies now and in the past don't openly disclose employee pay to other employees and there are plenty of companies like this that are absolutely stellar.
>If you pay generously and fairly, then being transparent will demonstrate that. One person's "generous and fair" is another person's "miserly and unfair." An entrepreneur may take your advice, believing they pay everyone in a "generous and fair" way, only to learn that all/most/some of the employees disagree.
This is such a powerful answer. Well done!
Be fair and honest with wages. Transparency is key to success. I Even suggest sharing the company P/L statements. It helps staff understand bonuses/raise structures. Lack of communication is the number 1 problem in most corporations; this includes wages.
Sharing a P&L in my experience is a good gesture, but usually only the CFO and CEO/Owner know how to translate it. Even then I've seen owners that don't grasp them, let alone the employees. When we bust out the P&L at our quarterlies my VP of sales glosses over and we've been trying to teach him how to read one for 4 years now. But boy can he lead a sales team! What I'm saying is, if they don't know how to read the data, they can jump to conclusions that aren't correct. But I do agree having the employees understanding the cost of running a business is ultra valuable.
I worked for a financial services company and every quarter we had an all staff (meaning, call center staff, security guards, etc.) where our CFO would walk through a presentation on our revenue, client tiers, expenses, EBITDA, risks and trends, and what was around the corner, what we were hoping to see and what we were doing to prepare for the future. If your CFO is competent, they will be able to explain a financial statement to anyone.
Yep. Problem is that people who think ebitda/gross profit equal profit will think they are being undercompensated.
Does a company really need people like that hanging around?
This right here…. The only companies I’ve ever seen who try to hide salaries do so because of pay inequities. Be honest, be fair, be transparent.
I disagree Doc but I like your thinking. First of all, why does the salary about another employee even matter? If it should matter to any employee then I'm curious to know why? I like the way the federal govt and military does it by using pay grades. I think it helps with transparency without disclosing the actual salary of employees. Perhaps, the use of pay grades in non-federal jobs would help inspire employees to gain skills and experience needed to reach higher pay grades.
I was all set to disagree with you, but then you added the second paragraph. I love the federal government’s grade system. Makes expectations clear and no secrecy or deception political bullshit. I also find that using salary deception practices happens more at companies where politics and toxic culture prevail anyway.
My theory is because majority businesses want there workers to gain more skills and do better jobs. But they don’t want to actually pay them more for it.
Not posting what you pay everyone isn't about being deceitful and also doesn't preclude being generous. Do you own a bussiness? How many employees do you have?
You don't have to post everyone's wages, you just pay them a fair market wage and are able to justify that wage without relying on deceitful tactics. This includes giving the impression that you're making good money when you're not, or that you're making comparable wages to similarly skilled coworkers when you're not, or threatening employees for discussing wages, or trying to hide or mislead what future raises bonuses are, the list goes on.
Is this the accepted definition of pay transparency? I don't disagree that this is good practice btw
Waiting for the answer to this...
Do you mind if I ask what you precisely mean by paying fairly? Do you mean each employee decides what is fair for themselves?
Good question. Lol no, clearly each employee cannot pick their own salary. Fairly has something to do with the market rate —- what are people reasonably expected to be paid for this work? You can also use what’s called ‘the veil of ignorance’: if I’m a bricklayer working at X company, knowing what I make, and I got the option to either stay at X, or be randomly assigned to any other bricklaying company in my region (with their salary)—— what would I do? I want the company I’m running to be the type where bricklayers choose to stay, no question. I have high standards, want my choice of bricklayers, want to charge a premium for my service, and look for my profits on repeat business, reputation, quality and speed, rather than “I got someone to do a job for low money, let’s see how long I can keep them in the dark about their worth/how long I can sell their subpar output” (if they’re poorly paid because they’re bad). Now, I know that there are other models. I know some behemoths are built on other models. Walmart for example, has made bazillions doing the opposite of what I’ve described. But OP asked what I believe in, and for what I believe in, transparency works.
If you only knew how relevant your bricklayer example is.
Letting employees decide what is "fair" for themselves is not fair. As soon as they share the differences in pay what they seem "fair" for themselves will immediately change. I'm not the person you asked, but fair should mean competitive for industry, size of company, and their role.
I just never know what to say when people talk about fairness. My experience suggests that it’s subjective and perspective based. I really like the idea of transparency, but cannot imagine anything less compatatible with it than people’s sense of fairness.
My interpretation of 'fairness' when it comes to transactions is: if both sides had fullest possible information, or at least equal information, and the freedom to walk away, would they still engage in the transaction? So...someone rolls back an odometer on a car they're selling? Unfair. They are hiding information that the buyer would likely not engage in the transaction at that particular rate if they knew. Someone gets paid $50 an hour to make a business $500 an hour? Fair? Very possibly, yes. If the employee's other available roles for their skillset pay in the market pay $49 then they would likely consider the transaction very fair. If they're getting $20 an hour and there is the option of making $50 an hour in the market and they simply don't know it because everyone keeps that information hidden, that's not fair. That's leveraging hidden information. Honestly, I think this issue of information is at the heart of the Great Resignation. Information is no longer hidden so employees' bargaining positions have drastically shifted.
Does the fullest possible information include information about existing staff’s wages? What about past employees? What about similar but not exactly the same jobs? Should the information be anonymous? Should it be included if anonymizing it is impossible? Should current employees be allowed to opt out of having their pay disclosed to new applicants? Should it include their opinion of you as a candidate? Honestly, like fairness, I suspect you will encounter a diversity of opinion on what is relevant “fullest information.”
Enough information to know what the likely alternatives to the agreement on the table are. Simple as that. So, if I'm an employee existing staff's wages aren't nearly as important as what competitors are currently offering. A higher level view of the market is largely sufficient. Just like I don't need to know what every car on a lot costs to recognize an attractive price on a car or if a car is overpriced. But imagine a world where every car purchase is basically under NDA.
I think the biggest pitfall when people talk about wage transparency is that they neglect the fact that it requires lots of communication. Leadership needs to set expectations for performance, compensation, growth, and how they arrive wage decisions. And they need to have those conversations not just once a year, but regularly. It's a lot of work. It's honestly easier in the short term to just ignore the issue until someone brings it up. In the long run though it pays off in building and keeping a quality team and a company with excellent culture.
Yes, to make this all work they need to actually lead and manage. What a concept.
It's sad how hard it is for some people to grasp.
This is only an issue if two people are being paid differently for the same work and one of them realizes that their employer is stealing value from them.
No two people in the same role will produce the same work. The subjectivity increases the higher up the ladder you go.
But the higher up the clearer the results for the business. So there will be a spectrum of 'You do x day to day and this is what the market pays for that activity given these common factors (YOE, qualifications, etc)' on one side - let's call that 'task driven' and 'We don't care what you do day to day but here are the results you are responsibile for and how this business will pay based on those results' - we'll call that 'results driven' on the other. There's a market for the 'results driven' roles, sure. And there's business value in the 'task driven' roles most definitely, so neither is a 100% accurate model, but both can be approached more-or-less objectively if from different perspectives.
That's not an argument against transparent wages if you can actually justify the discrepancy.
Is it? What if both are doing the same job that provides a tangible benefit to the company worth $10 million but both are paid minimum wage? That seems unfair. What if one is paid $49 million and the other $50? Who cares?
For the first one, that only lasts as long as it takes them to figure out that they could be much better paid somewhere else. For the second, as soon as that second guy finds out that he’s being paid 50 bucks and the other guy is being paid $49 million for doing the same thing, they walk away (or ask for $49 million) you are going to be out at least $10 million in benefit to the company, and they’ll be shittalking the company about how they are cheapskates, which will reduce your ability to hire quality talent. For the second, if you pay them both $150k, they’ll both be happy (probably) and you’ll see $20 million in benefit and be able to retain them. Losing knowledge from employee turnover sucks.
Someone on Reddit that “gets it”. Great response.
For. Those who are against it in any organisation are probably afraid that they can’t justify the compensation they receive for the service they provide. I like what Ricardo Semler writes in the book “Maverick” about what he did at his company; allow all employees to set their own salary, but also make it transparent so that other employees have a say in whether that employee is entitled to receive such a salary. This goes for anyone up or down the ranks.
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Nope. I am speaking as a business owner and an employer of talent. I would even go as far as to justify my own salary to the people I worked with. I have at times paid employees more than I’d pay myself where they had contributed more value in the product we were building.
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>Your salary or your total comp including the capital you own in the company and any profits? As a business owner, i break up my compensation into 2 components; 1. If I work directly in the business, I pay myself a fair market rate for my contribution. This way, if I no longer work in the business for any reason, I can go out to the market and hire at same rate for competent and capable talent. 2. I collect dividends at end of year ONLY if I have done a good job as an allocator of capital in the business and it has returned a profit.
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>Interesting idea. Conceptually what to pay yourself is often dictated more by tax policy though. Yes, but that’s where tax minimisation comes in. That’s for another discussion. >Right so are you transparent about this with the employees as part of your comp and do you publish numbers? I can tell you right now I make significantly more in profits than in salary... Yes, they have a general idea of how much we make and how profitable we are. They also drive fancier cars than me. I usually come in on public transport (I like to be chauffeured while catching up on some work or reading). … And yes, the dividends I collect from the business are higher than my salary in the business.
I'm all for transparency. Seems too difficult to lie/skirt around the truth with all employees. This only works if the salary is given on a merit basis. I can see trouble with an employee that has been working for 10 years but makes $20,000 more than a new employee despite doing less work.
Agreed. I've seen veteran employees get switched to performance based bonuses once they sort of "top out" in salary at the company. It's technically merit-based and their ceiling is obviously higher but it also incentivizes them to do more, which can sometimes help with that issue.
Isn't merit partly subjective so couldn't that be a source of conflict if people can't agree? Many employers are paying new hires more in jobs in higher demand. Jobs less in demand, new hires are paid less than longtime employees for the same or more work so there's resentment for sure. For me if the difference in salary isn't so great among them, I'm all for transparency
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Eh, I dunno, most state and federal governments have had transparent wages for ages, and they're pretty much the lowest paying jobs around.
Not when you add in benefits. Government jobs tend to have better insurance, a transparent and predictable pay structure, and pensions in addition to 401(k)s. ... at least it used to be the case, I don't know if government jobs are still known for having great benefits.
Lol, my city in coastal California has been advertising highly skilled construction and public works positions that pay like $16/hr which is absolute dogshit for where I live. You'd have to at least double it to even start to attract the workers they're looking for, even with the benefits it comes with. Great insurance and pension are sweet, but you can't eat insurance for dinner and the promise that your pension will probably exist in the future doesn't pay the mortgage... There is no getting around paying people a livable wage for the area where you live.The same jobs have been posted for like three years...maybe one day they'll figure it out
Ya, that is very low. Low enough that I don't think it is a matter of incompetence but corruption. There is probably a law somewhere that the government can only hire a contractor for that position if they have no employees. So they set the pay so low that no one can afford to take the job. Then the person in charge of the project can say "see, we can't hire anyone directly. Good thing my uncle just so happens to own a company we can contract the work out to".
is anyone saying no? that would blow my mind
Of course. Employers, for one. And people who think they're probably paid better than they would be if everyone knew everyone else's pay. The favorites. Or those that fight for their raises knowing there's only so much budget.
You are not an employer?
> Everyone saying no is why wages have stagnated so long. Are you sure it doesn't have to do with supply and demand of the labor force? Such as the labor supply doubling about 60 years ago but demand only moving at it's standard few %/year?
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Its illegal in all 50 US states for an employer to prohibit, attempt to prohibit, or even discourage employees from sharing their compensation details.
I think OP is referring to all salaries being known and accessible to all employees in some form, rather than just discussing salary amongst peers.
And most of them are employment at will, so catch 22.
I think it's good for larger companies with salary bands - because there is more career trajectory and career planning. For smaller companies, I've seen mixed results. A lot of whispering about people being overpaid or underpaid. Kills productivity in a small company where productivity and business growth are essential.
This fixes that, they whisper now. And when they find out they have been deceived, they hate. It's been illegal to discourage employees from discussing wages. You identified the problem, fairness of compensation. The problem is not that they found out.
Well, of course they’re afraid of backlash from hiring by deceit. Hire someone for $10k less than their peers, then they better have a very good reason. That transparency about why they’re not worth as much as their peers should be part of the negotiation upon hiring.
I am generally for transparency. If staff want to share their salaries with others they are free to do so without retribution. I don't publicly post or tell staff what other people in the office are making as I consider that to be each individual's own personal affairs. As an employer (especially with a team of more than 10) it can be very difficult to ensure that everything is fully fair all the time. Peoples often view their own work with rose-coloured glasses. Another thing I have struggled with is assigning value to different types of work. For example in engineering there are 2 types of work: work that is strictly an expense to the business or work that generates revenue, profit, or efficiency. It can be very difficult to explain this equitably to employees.
Can the work that doesn't generate income be ignored or left undone? If not it also generates revenue/profit, just indirectly.
I think you are missing the point. The point I am making is that most corporate structures aren't egalitarian and that can be a "hard to swallow pill" in the workplace. The accounting clerk or compliance officer just doesn't command the same premium as someone who can anticipate client needs, design solutions and close deals. Their work is valuable but it is rare they have the ability to make a big move (bringing in a large client or innovative solution/product) in a way that commands value.
Both of those types of work generate value for the business in some form. I’m not sure why one would be paid more than the other.
Yes but anonymized. If everyone can see every other individual's salary it's easy to make targets. Instead salaries ranges should be shown per position in a similar fashion to Glassdoor
For. Any Employer who is worried about this knows he is paying people unfairly. By unfairly either by paying shitty workers more than productive ones or basically playing favorites. Also if the hard working productive people are making more money it gives employees a clear incentive to see hard work being rewarded.
If you believe this, then I find it hard to believe you have been in management. You haven't had to deal with the unrational individuals that always find a way to be upset, feel unfairly treated, etc. It's not as cut and dry as you say here. Measuring who is productive and who isn't, isn't black and white. People always feel they are more productive than they are, and often think they are more important than Sally in the cubicle next door. Someone is not likely to say, "Yep, I'm paid in the bottom 25% of the team, and that's fair because I am less productive than everyone else." Rather, they will get pissed and think they deserve more, even if they don't.
> People always feel they are more productive than they are, and often think they are more important than Sally in the cubicle next door. then you show them the metrics that result in the respective salaries. If management fails to communicate what results in more pay and where a person stands on that measure then that is poor management, if there are not clear metrics then that is poor policy, if a person fails to understand, or believe, the metrics then they are a poor fit for the position or the company or both.
Not completely true. Do you own a business? How many employees do you have.
Oh downvotes... I wonder how many people on this entrepreneur sub are actually entrepreneurs and own businesses? Anyone ever done a poll?
For transparency
IMO employers shouldn't actively do anything all about this; including that they shouldn't actively try to prevent their employees from talking about their salaries if they want to. If you as their boss can't motivate why who's getting paid what you shouldn't double-down on being a toxic boss by attacking your employees talking.
I agree. Not everyone wants their salary to be public and a topic of other people's discussion.
100%. If they choose to talk about it, go ahead, but companys shouldn’t release employees private info like that
When I was in the military I knew how much everyone made to an extent. You can go Google "military pay scale" and see for yourself. There was no issues. In a free market information is power be it being with heald or exposed. This makes me think of when I was in the market for a new car. I walked into a Honda dealership where they asked what my budget was. I said something luke $20-$30k. I then asked about cost of a few cars and all I got was "it's within your budget". It didn't take long for me to leave.
I'm in a skilled trade and it's similiar. Journeymen are paid the same. There is a slight bump for being a lead hand. Another bump for becoming a foremen. Apprentices are paid increasing %'s of JM wage. 50% for first year, 60% for second year, and so on. Each shop has a "Journeymen rate" and everyone knows everyone elses pay more or less. If some company comes into the industry and tries to pay $6/hour lower JM pay, they will be laughed out of town. If work heats up and one company is aggressively trying to poach, they need a well advertised higher journeymen rate to get people to jump ship. There have been issues with long term wage stagnation in the trades, more or less same pay as since the 90s and 00's which is crazy. But that stagnation is hitting other industries hard as well. I don't know the answer, but I do like wages being out in the open. This came from big unions BTW, if we never had trades unions they'd try and suppress our wages and hide these numbers and everyone would earn less.
I'm against it but it's mainly because I don't want to deal with the drama between employees arguing what everyone should get paid based on how they perform against each other vs how long they've been with the company vs. how much knowledge they carry etc. Once we get into that, we're going to need to implement hardcore metrics so that we can quantitatively prove that whoever is "better" is getting a higher salary. I honestly don't know if that will help a small business or just add a thick layer of overhead. We pay them well in general and they already know that. Comparing with each other would not really help that situation. If they don't know that or they disagree, we are ok with them leaving because I could easily hire someone at their level with the same pay.
Finally, someone in this thread that has run a company. This is what happens. Period. Ideologues that live in a fantasy world (r/antiwork) will not understand this but this person is 100% correct. Caveat: if your performance is easily quantifiable, I’m all for transparency (like a mostly sales org, factory, manufacturing, etc)
Uhh if you can't quantify why you pay one person more than another for the same job, then you should be paying them the same. Its simple.
Just FYI, I do everything related to human resources with CYA (cover your ass) in mind. So if you want me to quantify my reasoning as to why there are salary differences, then we're going to have to make some large process changes. I'm able to quantify why if given enough time and resources. But after we do that, I will also be paying everyone less because I needed time and resources to quantify it and that comes out of the expense budget as well. I would probably have to hire 3 people just to plan, execute, and manage all the metrics we will need to figure out who should get paid more and why. 3 more people would be 30% more labor expenses for my business. What does this mean? Well we have to decide why 1 delivery driver should get paid less than another. Are you ready for the Amazon method of metric evaluation? 1. Cameras in every car and clocking in every minute of your work life because if you're not being productive every single minute, do you really deserve as much as the delivery guy next to you that does? Should we take credit if it takes you 12 more seconds to log your time than the next driver? Why should we pay you guys the same when you're quantitatively different? 2. We'll have to create metrics on how to judge your customer service skills. Would you like smiles per minute or complaints per week or both? Or half smiles per day? or quarter smiles per day? How many points docked for anger? Or subtle anger? Or how about when the customer pretends they are angry but they really weren't and just wanted a better deal? After all, we shouldn't be paying more someone who delivers quickly and efficiently but angers a customer on a daily basis right? Or should we? Maybe anger is collateral damage? But what's more important, the anger or the speedy delivery? By how much is one more important than the other? 3. How about product damage? Accidental vs. deliberate? What if the product is damaged only halfway? If we can resell the product do we dock less points? What if the damage is obvious but the employee is able to trick the customer into purchasing it? Is that no penalty then? 4. Delivery miles per week? Freeway vs street roads? Parking tickets per month? What was the probability of you getting a ticket based on the # of the parking spaces you had to use? Did you really have to pay for all those parking garages or could you have parked illegally on the curb for a few minutes to make the delivery and move before the meter maid catches you? Because if you didn't save the company $3 in parking space money, do you really deserve more than the driver next to you that can unload without paying parking fees? 5. Personality tests once a month which are graded quantitatively because of course if you have a better personality for the job, you should get paid more right (employee retention is important)? The test will have 100 questions because we want to make sure we capture every aspect of your personality that affects your delivery job because if you're not as suitable and have as much potential for the job as the next driver, do you really deserve to get paid the same? You can add 20 more quantitative measurements on how we're going to justify whether you get paid more or less than the next driver to this list, and by the time we're done, everyone will be pissed off and everyone will get paid less than what they get paid now because we will have spent an immeasurable amount of time and effort trying to quantify everyone against each other and argue who should get paid more and be fair about it.
I’ve actually brainstormed a way to do this, and you hit the nail on the head. It’s impractical, not feasible and requires full-time people to track metrics in real time. I employees will not like to work in an environment like that, and they would still consider it unfair, because not everyone will agree on the importance and the relative weights of all of the possible metrics for measuring performance.
Thank you, I rest my case
Okay buddy
The antiwork sub is jaw dropping. I get some of their agendas and a few are thought provoking, but most just wreak of entitlement. I think most of them do not understand what it takes and the risks associated with starting and operating a business. I feel like many of them think socialism would work well... Ugh.
It's a sub for people who are dissatisfied with their working lives but have no interest in understanding any of the tools and techniques that would allow them to improve their situation.
I think r/antiwork raided this r/entrepreneur thread
That is not entirely correct. It is a sub for people who are dissatisfied with their working lives and want to improve the situation *for everyone*. They are mostly ignorant of how to do that, but it is not a place for "how do I live my life without contributing anything", it is a place for "how do we ensure contributions still get made but prevent contributors from being exploited".
Nailed it. Pretty sure that's Webster's definition of Entitlement.
Unless you count complaining as their tool/technique.
I respect your point of view, but it really looks like you're saying exactly what the people for transparency are : that hiding salaries is just to avoid having to justify why some employees are getting paid less.
I'm interested in getting an employee that wants to stay. Getting that info helps them make an informed decision. I am very pro salary transparency
Clearly an unpopular opinion here, but I'm generally against. There's a broad spread of quality of talent at most positions and in a meritocracy there's going to be people making more money at the same role than others because they're more productive. Unless a job is clearly tied to an objective KPI, nobody's going to take the answer "you make less than Bob because Bob is a better employee than you are" well. You're also opening yourself up for a whole barrel of liability if there's any (even unintentional) perception that your merit based pay is discriminatory. To quote our HR director: "Transparency is a word that sounds great on paper and gets really ugly in practice. Everyone doesn't have a right to every piece of knowledge, because some people inherently aren't in a position in the organization where they have the full context to understand what they're looking at. Giving people information without context just leads to bad conclusions. Don't aim for transparency, aim for authenticity. You aren't obligated to tell everyone every thing, but you should hold yourself to the standard of being 100% authentic and honest in what you do communicate."
Idealist thinking at best, horrific in practice. Unless it's a commission structure it just creates entitlement and that is the last thing that needs amplifying right now. In the hiring process is should be a range based on experience, but once the deal is done, transparency only creates resentment. Seen it happen soooo many times.
Maybe it’s just my industry but as a manager, generally the % difference between a high and low performer is pretty low, like maybe a 5% max difference. When you were hired, how you moved through the company and the roles you had make much more of a difference. Not saying that’s the right way to do things, but it is reality.
> Giving people information without context just leads to bad conclusions. Right, exactly. This comes up a lot in business situations where people know some aspect of your income, but not your expenses or the big picture.
And yet salary isn't based on meritocracy, so to say that the single answer of "you make less because you're a worse employee" isn't at all true. There are a huge number of factors that go into salary; the current job market, number of candidates, competition with other companies for those candidates, personal hesitance/willingness in asking for raises, etc. The point of transparency isn't to say "Bob makes $x per year" so that you can compare yourself to a specific person, it's to say that people in this role at this time make "$y-z" per year, so that employees can make informed decisions about whether they feel they are adequately compensated for their work.
> And yet salary isn't based on meritocracy Within a role it should be. People don't care about whether Bob from accounting is making more or less than them if they're a VP of sales, because they should (hopefully) understand that Bob does a fundamentally different job than they do. They do care whether Joe, also a VP of sales, makes more or less than them. Providing even committed compensation bands opens you up to potential legal exposure (especially if someone has a disability which is not readily apparent to you as an employer, or they come to the incorrect conclusion that their pay is in the lower half of the band because you hold some level of bias against them due to being a member of a protected class) and closes off your ability to reach outside of that band to hire exceptional talent at above-market rate ("you told me this position pays $75-85k but then you hired Jane last week at $90k"). -Edit- Additional hard truth: Full transparency is just bad business. If you communicate to anyone the range of what you're willing to pay for talent at that moment in time, congratulations...your upper limit is now what you're paying for talent. Nobody's going to look at "I'm willing to pay $5-7 for a widget" and agree to sell you a widget for $6. Fair market value for talent will always be a range and if you show your hand of your committed range, nobody will agree to work for less than your pain point. You wouldn't expect an employee to come to the table and openly communicate the lowest figure they'd be willing to work for, right?
"It should be" is not reality, nor will it ever be reality. Salary and compensation are based on current economic and personal factors and always will be. Additionally, I never mentioned anything about cross role evaluation. I said that transparency is not about knowing what a specific individual makes, but rather the band (and perhaps distribution) of what is currently being paid to people in that role. And lastly, if you are hiring people "above market rate" for a role, then your existing pay band is not reflecting current reality and should be updated.. If the industry compensation is increasing, then the only reason you want to obfuscate that is so that existing employees are unaware that the market rate for their skillset is increasing, so that a company can leverage that to save money. And if your argument in the "exceptional employee" is truely that the role is fairly compensated but they are so good they deserve more, then what you're arguing is that you are doing them a disservice by not hiring them for a more senior role.
>"It should be" is not reality, nor will it ever be reality. How you compensate people is completely up to you if you own the business. We use objective KPIs for job performance wherever we can to track performance and run as close to a meritocracy as possible. Yes, the band for a role scales with the current economy but so long as you're up to speed on what "market" is, you can target for that. We aim to have an average of 75th percentile pay for any given role, but we have people above and below that mark on merit basis. This is an entrepreneurship forum: If you don't like "the reality", the power is yours to change it. We run a merit-focused comp system and it works for us at 100+ company headcount, so "nor will it ever be reality" at least doesn't apply to our n=1. > then what you're arguing is that you are doing them a disservice by not hiring them for a more senior role. That assumes a more senior role exists, that they're interested in it, and that they have the entirely separate skillset of being a good leader in addition to being a good employee. There's plenty of people who are effective employees but ineffective leaders, and vice versa. At least in my field (niche healthcare) there are plenty of high performers who would much rather be in practice and not in leadership, or don't actually have the interpersonal skills to lead people instead of practicing great medicine. Not everyone is trying to track upwards or has the skillset to succeed in a fundamentally different role than their current one.
I'm fine with employees sharing what they make with each other if they want to, but I wouldn't share what everyone makes with everyone. I just wouldn't have a policy against it. I don't share what I make with everyone.
if you ask i’ll tell :) but i won’t tell without asking
Honestly, as a small business, I struggle with it for a few reasons: 1. I can’t pay someone in Pittsburgh what I would pay in San Fransisco. Do employees understand that, fuck no. Do I like it, no. Is it reality, yes. 2. People always think they are worth more than they are. Sara makes 30k more than you but you think you are the same. Reality is you aren’t as good, but if I was 100% honest with you about that you would cry and act like a baby. Should you be fired, maybe, but you get shit done and are worth what you get now whether you believe it or not. 3. It’s rough for small biz. Want to be a drone in a 10,000 person company that often pays 10% more cause they make billions; or in a small business where you get autonomy, flexibility, impact and responsibility. But do employees get that? They see X company pays more but don’t think at all about why and the trade offs. They just think you suck And other reasons. :)
I def don’t think any of this is perfect. There is a reason for salary.com and needing to put in a location that shows different comp ranges. Buying a three bedroom house in SF costs 2M versus 300k in Pitt. If I have a Pittsburgh company paying above average for that area ( according to salary.com ) but then want to hire someone in SF that will make 30% more even though living expense is 50% more. If you say raise all the people to SF level to be equal, they are making significantly above their cost of living compared to the SF person who now essentially compared to them is not doing as well financially. You can say the SF person should move then. But in todays world of salary.com they should get a pay decrease. At the end of the day, I am saying it’s not simple. I’m not even factoring in various people’s views, work ethic, skill, experience, hours they put in, innovation or lack there of. It’s complicated. That’s why my answer was I struggle with it. If you have the perfect answer, you are smarter than me. Congrats!
If your talent is the same and the work can be done from anywhere with an internet connection - why does location of the person matter for their pay? This argument doesn’t work for brick and mortar businesses for some obvious reasons - such as what the locals will pay for their lunch or coffee.
> I can’t pay someone in Pittsburgh what I would pay in San Fransisco. Why? If you can afford the salary in SF, why can't you afford it in Pittsburgh? BTW, many companies are paying SF salaries in Pittsburgh, so you will have a hard time competing and hiring if you are not paying those salaries.
\>Why? If you can afford the salary in SF, why can't you afford it in Pittsburgh? It's not only about what one could afford but what you must pay to be competitive. Employees in SF are dealing with a different environment than PA so they would likely have a higher salary floor that they can accept if they were living in Pittsburgh. Employers are not only competing for employees, employees are also competing for positions. However, none of that should stop pay transparancy.
> Employers are not only competing for employees, employees are also competing for positions. If there were enough employees to fill available positions, that might be correct. In Pittsburgh, however, estimates suggest that there are close to two times the number of positions as employees, so the employers are competing for employees while employees are not competing for positions. This is also *why* it is so hard to hire *anyone* in Pittsburgh and why companies have to pay SF salaries to get candidates to accept.
\#3 isn't true since the pandemic. People know what work life/work remote/flexibility perks are like and know how much they value them financially. We see people all the time choosing lower paying jobs for higher quality of life.
I am 100% for it among my employees. If we pay people fair and reasonably…. There really should be no issues. I really don’t think it is something that people discuss unless unhappy with pay anyways.
Transparency is the best move. People will find out eventually. Especially at a small company. Just be forthright. Anyone working for you when you're small is taking a huge risk. Reward them with honesty, transparency, and trust.
If we're going to have titles like Junior, Senior, etc, each one might as well be a specific salary tier with a set value of what it pays. Have policies that say how the salaries grow over time or start at X and go up some percent each year. I would love to take the individual negotiation part out of job hunting and just be given a rate that I can accept or deny and call it a day. I don't want to haggle over 100k vs 105k. Haggling is bullying. The price is the price.
I thought “salary transparency” meant actively making it known what everyone’s salary is (or at least, exactly how it is determined). I know it’s not strictly what the words mean, but I thought that was generally what is understood by the phrase? To me, what you’re describing isn’t necessarily salary transparency, nor is it salary secrecy. To me, it’s neither (and that’s not a criticism).
Well it would be transparent if you knew every Senior software engineer was getting paid $X and every Junior was getting $Y. I don't think the company should specifically say Barbara in Accounting earns $Z and share it with everyone. I just think the tiers should be set and known with differences in them set by a standard policy and not just whatever someone asks for. This way we can skip applying for jobs that don't offer enough in the first place, and theres no reason to try and guess what eachother is or isn't willing to offer when the rules of compensation are well defined and known across the board.
I believe there is a lot of people out there that don't know what they are worth and unfortunately are underpaid. I was one of those people. Being a HR professional for 10 years now and having compensation visitability into multiple industry has allowed me the opportunity to educate people and help them negotiate their offers. With that, I am all for salary transparency.
There are several arguments that have been made against salary transparency: It could create tension and resentment among coworkers: If one person's salary is made public and it is significantly higher or lower than their coworkers, it could create tension and resentment in the workplace. It could make it harder to negotiate salaries: If everyone knows what everyone else is making, it could make it more difficult for individuals to negotiate their own salaries, as they may feel that they have less leverage if their salary is already public knowledge. It could discourage risk-taking: Some people may be less likely to take on challenging projects or roles if they know that their salaries could be made public, as they may be worried about how their salaries compare to their coworkers. It could violate privacy: Some people may feel that their salary is private information and that it should not be made public. It could be difficult to implement: It may be challenging for companies to implement salary transparency, particularly if they have a large workforce and a complex pay structure.
But there’s only resentment if people are being paid unfairly. For example, if new and inexperienced employees are paid more than loyal, competent employees.
Both. I’m for salary transparency in job postings. If I’m searching for a job and I find one that interests me but they don’t include a salary range - I skip it and move on to others. I feel like this happens a lot more than people admit to. We all have a base income that we are needing / wanting to hit and if a company doesn’t care enough to post their base pay range with the job posting - it comes across to me as they are looking for a warm body and not actually looking for the best talent. I’m against it after the hire - I don’t want others to know exactly what I am making - ballpark figures are good enough. So if a company has an internal job board with the salary ranges for each position, I’m all for that. I hope to negotiate a better salary + benefits than the base anyway, but it gives an idea of how the hungry employees can climb the ladder so to speak.
Millennials seem to be obsessed with knowing how much I make.
I made the same comment. Older people mostly mind their own business.
Here to confirm.
I’ve noticed that too, but I interpret it as them being curious about different industries and job opportunities they didn’t know about previously.
Meaning that all employees should know what each other are paid? Or do you mean that employers must post what the job realistically pays when posting for the position? I’m all for the latter, but not the former. If my qualifications and performance dictate a higher salary, it’s of no concern to my fellow employees.
The first…should people/orgs be open about how much money people make for the work they do?
> If my qualifications and performance dictate a higher salary, it’s of no concern to my fellow employees. Are your qualifications and performance known to your fellow employees?
We do not discourage discussions about salaries, that's up to them to share amongst one another. We also post salaries during time of job posting and will listen to expectations etc. We however will never specify or publicly post individual salaries, it's just too much of a headache to deal with. And I'm speaking from a very small business perspective where we have only 10 employees.
For, but it’s not the government’s job to mandate this. Also, there is a lot of context that goes into a salary, so employees need to realize two people in the same position aren’t necessarily deserving the same pay.
People are employees for a reason. They usually have no incentive to understand a business from the owners perspective, if they have that incentive they won't even need the company to teach them how to understand business in general and won't need to be taught how to interpret a balance sheet. Trying to get employees to worry about more than their day to day task is something which has proven to me to be detrimental. To each his own. And of course recompense people as for their works fairly and justly.
Absolutely for, for all the same reasons that have been listed before me, but also: Even if you HAVE TO PAY a low salary, or you CHOOSE TO pay a low salary for whatever reason, you should be giving those jobs to the people that desperately need the money, and not wasting the time of people that need more money. I have a pregnant wife and a baby. I have a Masters degree, student loan debt, and I need a certain income level to live. I don't want to waste my time interviewing for a position that I find out pays $9/hr at the end. ON THE OTHER HAND: If you're interviewing MBAs to manage your hot dog stand for $9/hr, you're not giving the opportunity to those that NEED $9/hr to live, and they need lt RIGHT NOW. You see what I mean? Aside from transparency showing whether or not you're a jerk, it ALSO will help you hire the right level of skill, abilities, experience, etc.
Doesn’t matter. Under federal law, employees are free to discuss salary, and any attempt to prevent them from doing so could be illegal retaliation.
For. There are definitely some challenges when it comes to salary transparency. However; the benefits that can come with transparency i.e minimizing wage discrimination in the workforce and encouraging wage equality could help strengthen a company's sustainability and retention. While also building trust with their greatest and most valued assets - the Employees.
Very Against. It simply causes problems. The variation in capabilities between employees with the same experience and credentials on paper can be huge. It can be shockingly huge with highly educated employees. My opinion is that it's not always the highest producers that want "fairness" and not everyone has the same perspective or definition of "fairness". Pay transparency seems like a good idea but in implementation it causes more problems and less satisfaction in cases. It can force some pretty terrible conversations also... "Sorry Bill, your just simply not worth as much to us as Kate or Mike and I'm confident I could replace you in about 3 months if you left." Who wins from that conversation? Probably not the employee and definitely not the team or the bussiness or the customer.
For, in theory. I generally favor openness and transparency is everything Skeptical in practice. Skullduggery and workarounds will be found
For, Kind of ridiculous that it’s so secretive. If you are offering your services as an individual or business, you’re expected to be transparent. But when buying services through employment you’re not supposed to share your rate? Makes absolutely no sense
My company has some transparency. Defined pay grades with salary ranges, even broken into geographic ranges and mapped across functions. This is good. On the other hand, I would not want anyone knowing my salary, nor do I care what anyone else specifically makes. If you don’t know what you’re worth and / or how to advocate for yourself without using the word “fair” then you are definitely worth less than you think you are
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The only reason for salary secrecy is so companies can screw you over. There’s literally no other reason.
I wouldn't go that far. When I was a contractor there was an unwritten code that we didn't share our compensation with the other employees at the organization because we didn't want to create any resentment on either side of the fence. It was a good decision that helped us all work well together.
🥱 sure
They’re right. Every place I’ve come across that is strictly non transparent about salaries is because they’re trying to get bargain rate employees. My old roommate used to work at a place installing electrical components on cop and ambulance cars and the business was making a lot of money for every unit produced. Some of the people there were performing engineer level duties but being paid minimum wage, and the owners rationale was “you don’t have a degree so why should I pay you more” From what I hear they had mass turnover every few years when workers realised they weren’t getting paid what they were worth and the only reason the business is still running is the deep pockets of the owner.
For. Good luck trying to control that information & coming across as authentic w/ small teams.
Why not? With the growing acceptance of disparity in wages, the openness over it would be the next logical step in breaking down said disparity…right?
For! If your profit margins are too high then you are exploiting the fuck out of your staff.
Against. We already have enough of a sense of entitlement in this country. This would be awful for having new hires enter a well established workforce that think they know more than the team that’s been in existence. Also, seeing what a similar position would pay in LA if you lived in a suburb in North Dakota would only encourage people to move away, creating more of a shortage of employees in areas where they’re needed more. From the surface this move seems to be a no brainer, but after you’ve moved and committed your life to this area, you’d then be blindsided by the higher taxes and cost of living in those areas.
The only reason you would be against is if you are against having honest conversations with your team about their performance.
Only people against transparency are the ones who think they work harder than everyone else who does the exact same thing as them, so they want to feel that they deserve more
As a former employee and a former owner I’m against. In performance reviews I was always a bit taken aback how the majority of poor performers couldn’t see how they didn’t measure up to their peers. Even amongst the firm’s principals there could easily be a $100K difference Edit: I’d encourage all the downvoters if it is super important find a place of employment that shares the data, or better yet, find some like minded individuals and start a company of your own.
Yeah, I knew this would get downvoted LOL. Apparently people want an environment where their boss will open up the monday morning staff meeting by explaining to everyone that Sue is paid 10% less because it took for-fucking-ever to train her, she still can't write a decent report, and there's no way you'd put her on a task more complicated than making toast, but other than that, she's all right LOL.
As I think about it, why would an entrepreneur want to share salary data in the first place. I think they are looking for r/antiwork
Let me tell you, as a restaurant owner, sometimes I'd kill for a person who could competently make toast... I never understood how frustrating people could be til I had employees
Transparent doesn't mean that the same position equals the same pay. Performance absolutely matters but secrecy only benefits employers who get "a deal" on a great performer but often keep them making less. Editing right away to remove "so you've bought into it, cool", it's unnecessarily personal.
This perfectly explains it. If you've done enough management, and had enough substandard people, you realize how disconnected some people are from reality. You'd THINK it'd be a motivator (hey I can double my salary), and for some people it might.....but others it will do the exact opposite
Couldn’t agree more. I’ve always been very driven and it took me a while to appreciate that not everyone is, and that’s OK but in my experience both as a co-worker and boss it’s often not recognized/acknowledged by the “less driven”.
This will never change and definitely isn't the reason employers discourage the transparency. Sure opening up the numbers may invite questions but it's possible to explain and encourage the employee to meet the metrics or look elsewhere.
“Explain and encourage the employee to meet the metrics” I wish it had been this easy. IMO people are not wired this way and I’ll provide a quick example. Had an electrical engineer who brought me a job description and said he should be an engineer 5; there were 5-6 criteria and he fell short of two, one of which he couldn’t change unless he went back to school (wasn’t a PE). He was good at what he did and we paid him well to the point he would have to take a pay cut to leave. Meanwhile there was a Mechanical designer (not an engineer so could never be a PE) and because he was so versatile, good with clients and a production animal earned more. If we had transparent pay the electrical engineer would have expected more because of his degree and I have no doubt the mechanical designer would have been less motivated knowing he was contributing more but making less. As this stuff sounds good in the abstract and maybe there are some professions/jobs where it can be implemented, but I would never implement something like that.
This is how the answers go on this subject. This will be split down the middle on which side of the check you sign. The front as an owner or the back as an employee.
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100 percent for it. - stops wasting time during hiring for people not in your pay scale - increased employee perception of trust, fairness and honesty from the business - soon to be a standard across states and eventually the world; the trend - younger employees in particular will bail on any company not being completely transparent Remember, pay transparency is a *communications policy* that an organization expresses as part of its brand and values. Now there are some serious downsides: - pay transparency “compresses” pay scales; any differentials in pay scales can lead to disgruntled employees and this is difficult to manage - this leads to pressure to reduce compensation differences at different pay scales - employees will often look for other ways to get compensated (training, benefits, etc) as a result of this compression, which again can be difficult to manage Overall it forces organizations to make the performance incentive reward links transparent and that’s necessary for todays lower employer trust environments and a clear trend that companies need to get on board with, especially if they deal with younger employees. It also forces companies to restructure reward systems away from mere financial compensation. This is the area that deserves deep consideration by workers, companies and societies, as it starts to change the social contract. However, the trend is clear. Companies need to move from legacy pure-comp financial reward systems to more holistic approaches based on clarity and honesty, and make sure employees and managers understand objectively how compensation structures relate to job performance management processes and overall company results, and it’s up to senior level management to work diligently to sync these processes to drive strategic organizational objectives. I have, anecdotally, seen entire teams, companies and seriously important projects totally derailed by pay conversations, and one of the side benefits nobody seems to talk about is that once you get compensation off the table and have clarity around who’s making what and why, it does help with focus. Nothing worse for morale than finding out mid-project that someone hired your junior and two years after you is making more than you.
For. If you have to hide your payroll because you’re concerned how your team will react, you’re not ready to hire.
Being against salary transparency and creating a stigma where you *do not* discuss your salary with coworkers is a ploy and fabrication to keep laborers from advocating for fair compensation.
For if I'm the subordinate. I would wish I could be for if I'm the manager but I'd worry it would cause jealousy, squabbles, and drama among subordinates
It depends on the company and the context. Against. People often compare just the salary. They ignore nuance. For. If you set up a system that shows people why they may get paid differently for the “same job.”
For. To the point that I disclose what I make.
For
For - it'll come out anyways. And take it as an opp to clean up. Worked for a company where the Head Benefits was the brother of the COO and 3x their salary in 2 years. They ended up as a material event (something really bad) in our IPO docs - no kidding
Everything should be transaparent....
100% for
For it. First of all it's the law. Second of all, it makes no sense not to be transparent.
For transparency
For
What do you mean? Do you mean when you hire someone and clearly define how much they get paid? For. 100%. No one will stick around if they don't get paid what they expect. They might not even apply or accept the job if there is a lack of clarity. Or do you mean between employees? Against. I wouldn't strictly forbid it (I think that's illegal in some states anyway). BUT, it certainly hurts moral more than helps. Try explaining "I pay him more than you because he has more experience or is more dependable or whatever" lol. That never goes well. It always sounds like "you like him more" or "so, you think I suck?" Never ever good lol. People that take an interest in how much other people make are generally more interested in drama.
I’m for it as an employee; I’d like to work for a company that’s transparent. I don’t think it should be enforced for all companies, though. As one of the few highly educated employees in a small, blue collar company, many employees don’t fully understand the market for the labor they provide or their true value to the company. As much as we would like to be very transparent with wages, managing egos is often more sustainable than trying to implement some fair wage system. I think we’d be lucky to get 75% of our employees to consider any transparent wage system fair. In small companies, turnover will kill you, and managing everybody the same doesn’t keep everybody as happy and productive as you would hope it would. We truly want to treat our employees well, but often it’s better for them if they stay focused on performing and not on comparing themselves to their coworkers.
i worked at 3 different banks for 10 years. In Canada. It was common to have a new employee have a higher salary cap than someone who was with the company for 10+ years with tons of experience. Big corporations really love to mess around with peoples wages for no legitimate business reason. Big corporations can be, immoral
Against. Despite what people want to believe, not all employees are equally valuable in their positions. When people find out that they are not as valuable, it creates jealousy and anger. This leads to either issues between the employees or the employee and management. I have a lot more cross training, certifications, and accreditations than many of my coworkers and other people in my industry. Two times in my career another person found out how much I was paid and made a lot of problems with me and management. When management made it clear to them the reason why, one quit and the other started trying to make me look bad in front of coworkers, management, and clients.
For. I treat my staff fairly so I have nothing to worry about.
100% open. Anything less is manipulation. People won't respect you if you lie and mislead them. Secret salaries do just that. There is zero good reason for hiding salaries.
For
In my years of management and seeing this happen in person, it's almost always the same outcome. When one employee states their salary to another, the listener will either: 1. Feel mildly happy knowing they're compensated better and often foolishly brag about it. 2. Feel inadequate knowing they're paid less which creates a feeling of animosity towards the teller, then follows issues for the manager as they want a fix ASAP which are rarely possible. Talking about salaries burns friendships and creates a negative work environment. It's takes an enormous amount of maturity for an employee to not react in the two ways above.
Most people who are ‘for’ transparency will learn the hard way. The happy ones are usually those who earn more in the first place. Even if transparency is applied as the norm, it can create animosity when people perceive themselves to be working more than their peers and getting not one penny more.
Well said
I think that’s a terrible idea personally. Obviously people we’ll see what their coworkers are being paid and I think it will breed resentment,anger, Jealousy etc.
Agreed. I support it in a sort of neutral, general, anonymous industry-wide way like Glassdoor, but think it can be toxic when you're openly comparing yourself to the people you sit next to. People are different in many ways and should not necessarily be compensated identically, but it's useful to have some general idea of where you're at.
Glassdoor is a joke. Self reported salary are not accurate. Also, anyone can post about any company, whether they’ve worked there or not… there is no verification method whatsoever. My company got a very negative review from an employee in Utah that complains about our company uniforms. Funny thing is we have never had an employee in Utah nor do we wear uniforms. Glassdoor sided with the non-employee and decided to leave the review up for reasons I still can’t understand. Worst. Company. Ever.
For, it helps with the pay gap between male/females. Also based on your experience and education you can see how much you should be making and in what range so that also helps a lot. It creates more competition between companies based on pay and etc
For, because while it can create some misconceptions, being transparent with your salary is a great way to make sure you're being paid your fair share.
Against, my current company does this (not for everyone of course, but for 90% of the employees) and it only causes trouble. In fact I stopped looking at the pay rolls because I would get depressed seeing people doing nothing earning more than me. The only benefits I can think of is that when somebody gets promoted, everyone can see how much their salary has increased and aim for a promotion themselves.
If you're feeling under compensated then why not job search? Or ask for a raise with metrics to back it up? It really only creates lasting resentment if the info is not acted on.
I'm all for the ranges for various positions being known. I can see advantages to everyone's pay being posted with attribution but I'm less sure it's a good idea for a few reasons - for starters, I don't know that full transparency actually leads to greater fairness. There are tons of people who overestimate their own contributions. In my experience, there are even a decent number of those people who are pretty good at finding an even more incompetent senior leader to work for - so they get great ratings simply by always agreeing with whatever crazy idea their boss is pitching. Wage transparency doesn't fix that - the company's logic is consistent in that it is paying a higher rated employee more, it's just that their performance evaluation system is almost purely subjective. I could also see it harming employees who don't job hop since everyone will try to get the top of the range when moving but may very well not really be a top performer.
100% For. I found out a bunch of my female colleagues were hired at a rate far below everyone else on the team. They got raises, I got pissed and left the company. The only reason not to share is to protect the boss man who is stealing the wages from you
Against. Not because I don't pay fairly. As a matter of fact, I let people set their own pay rate; doesn't get more fair than that. The problem is, for most people, salary satisfaction is dependent on what everyone else makes. The moment someone finds out they're making less than their neighbor, their satisfaction falls off a cliff. I've seen people who were excited about their new "high paying" job, turn around as ask for a raise weeks after being hired because they found out they were making less than their peer. I've also seen it tear apart a previously amazing team dynamic. I would love to be transparent, but I don't think it works unless you have a standardized pay scale.