Saturday, July 12th, 2014

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Taking the Secrecy out of Salaries

As a naïve young woman in the food service industry, I knew very little about salary negotiations and fair pay. I didn’t think to ask for raises, assuming that one would come when I earned the increase. Then I found out that my coworker, who had just as many responsibilities (and seniority) as me, was making significantly more per hour. When I confronted my boss and asked for an explanation, he had none; my salary increase was awarded, but the feelings of frustration and injustice lingered.

It’s often considered vulgar or rude to discuss money matters publically. People don’t want to share what they make because they risk offending others by the large amount, or feeling undervalued by the small amount. But how will we ever find out whether we’re being compensated fairly if we don’t ask? There are potential benefits that arise out of full salary disclosure, and they’re about more than what’s “fair”—they’re about what’s best for us—the work force.

Employees Who Are Motivated and Efficient

There are several factors that determine one person’s salary from the next. Salary raises are often given to employees who stand out or perform more aptly than their coworkers. However, if the raises are kept secret, how are the other employees supposed to realize that their performances are not optimal?
When I was told that my coworker was earning more than me, I was not resentful toward him; rather, I wanted to know what I could do to improve and make the same amount. If a supervisor lets the staff know exactly what it will take to get fair pay, workers will rise to the occasion. Alexandra Levit, an author and career expert, believes that when employees are “better informed,” they are more “satisfied” with their jobs. Therefore, both parties benefit—employees gain more money and supervisors gain happier, more productive employees.

A Better Work Environment

When matters remain hush-hush in a company, employees become suspicious that something is wrong with the company, that they are not making as much as their peers. Keeping salaries a secret is hardly foolproof; people talk and let things slip (how else did I find out about my own salary slight?), and that only leads to bitterness and frustration. When salaries are public, managers are held accountable for why each employee makes a certain amount.

“[Salary disclosure] ensures that everyone knows what a given position is worth, and can be assured that all colleagues at that level are making roughly the same amount of money,” explains Levit. As long as people are given logical, fair explanations for each salary (which should be a mandatory practice anyway), all water cooler whisperings of nepotism, bias, or otherwise unequal pay distribution cease to hold any weight.

Take Whole Foods, for example. Part of this business giant’s policy is to give all employees access to what each individual—from cashier to executive—earned in the previous year. One might assume at the very least that people would obsessively check this information, yet, according to this article, the salary binders are rarely utilized. This proved true at the two Whole Foods I contacted. One manager said she had never even looked at the binder, but that she knew of its existence. Just the fact that the information is available might be enough for employees to feel confident that there are no shady dealings taking place.

Leveling the Playing Field

When one individual makes more than another, it often reflects job performance or past work experiences. Sometimes, it involves less tangible, job-specific qualities, such as personality. An aggressive, confident individual might be able to negotiate a higher pay rate than someone who is just as experienced and performs equally well. Perhaps that’s just a reality of the business world, but is that necessarily fair?
When it comes to business affairs as potentially volatile as salaries and raises, employers should try to keep things as leveled as possible. Perks and higher paychecks should be given out based on work-related merits, not on who is the most persuasive in a meeting. If one person asks for a raise and receives it, his or her peers should be aware of that award and have the ability to make a case for the same treatment.

It’s Good for Management, Too

The main reason for keeping salaries a secret is to mask inequalities in pay. After all, if such a situation existed (and it often does in offices), opening the paycheck vault could lead to mutiny. “Making employee salaries public knowledge will only turn out positively if you have already eliminated internal pay disparities and you know that your system is fair,” says Levit. “If you haven’t, you are opening a major can of worms.” Management should strive for fair pay, and yet many do not because those in charge can keep the pay imbalances undisclosed under the guise of “privacy issues.” However, their jobs could be made a little easier if salaries weren’t kept under wraps.

Look at the U.S. government—salaries of government officials have been public knowledge for a long time. “As a result,” Levit reasons, “Salary is rarely a point of contention.” Keeping pay levels open makes it easier on HR and management to figure out pay rates for new employees, raises for current employees, and so forth. Plus, it helps them better manage the younger generation of workers who are much more open to sharing personal information (like salary figures). As one HR manager puts it, “[The younger generation] has grown up with a much different expectation of privacy, and work life in general. The dividing line between work and personal life is blurring more than ever.” With the new workforce demanding access to more information, management may need to alter the old-school notion of salaries being private.

Why is personal income considered such a private matter? People fear being judged based on their earnings, and, unfortunately, those fears are somewhat valid. Our society is fixated on keeping up appearances and evaluating a person’s value by his or her salary. We assume that others make more than us, that they live a better quality of life, or we worry about being an office outcast for getting a raise over others.

Perhaps if salary disclosure became a common public practice, it would eliminate the taboo nature of salaries and reduce the tension and hidden frustrations that exist in most offices. It may be in bad taste to discuss money matters publically, but salaries are a work, not social, matter and should be subject to the same open-book treatment as benefits packages, 401Ks, etc. Even the Ethicist for the New York Times deems salary disclosure as not only ethical, but “admirable.”

When there are clear reasons for raises and higher salaries, that means everyone has the same opportunity to earn more. That knowledge alone would work wonders for employee morale. Equality in the workplace benefits everybody and is worth standing up for, even if it means we have to break a few old-fashioned social norms to get there.

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One Response to Taking the Secrecy out of Salaries

  1. Great ! says:

    Hello, I am 15, and I am taking a Business course at my highschool – but I have NEVER receieved such useful information!!!
    Than you for putting this up, and I will remember that money matters are not something to keep odly discreet when dealing with employees.

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