After claims that thousands of Google employees shared details of staff salaries with each other to find out if they were being fairly paid, is it time for businesses to be transparent on remuneration?
Yes, says Peter Burgess, managing director at specialist recruitment consultancy Retail Human Resources
We have had a transparent policy on salaries for 20 years. It works. It builds trust and respect, and ensures that people are not, unwittingly, treated unfairly. I don’t actually see the logic behind not having an open-salary policy. People ask me why I do it. I say to them, ‘why keep it secret?’ Jobs are clearly defined with a salary connected to each role and strict criteria on the qualities required for people to qualify for a higher salary.
The commission structure is easy to understand and when managers recruit someone from another agency there are no ‘private deals’ where someone negotiates a few thousand more on their base pay or an extra week’s holiday. I say to managers, ‘if you had someone who’s earning a lower salary than someone else for the same job, could you look them in the eye and tell them why that’s the case? If people don’t understand how they are paid then they become suspicious of it. They think, ‘I’m sure they are doing this to screw me over’. They
The problem is that so long as salaries are kept secret, the ancient discrepancies in what people are paid are carried forward by employers. The only way to sort this issue out is for salary policies to be open. Sadly in the private sector almost all companies have a culture of secrecy around who is paid what and until that changes this problem will not go away. @RHRUK
No, says Penny de Valk, managing director of people management business Penna Talent Practice
There are two key areas to consider – the personal impact of a company disclosing the salaries of all staff and the business ramifications of doing so. Most people regard the subject of how much they get paid to be personal. Plenty would find the disclosure intrusive, and prefer salary details to be kept private.
On a business level, companies shouldn’t be asking themselves ‘should I publish salary details?’ but ‘why should I publish salary details, and what issue would this address?’ If it is about concerns around equity then they need to build a culture where employees can feel confident that reward is determined in an equitable fashion, so that level of transparency isn’t required.
Some organisations have broad-pay banding and employees know the grade they are paid within particular levels, but this can be time-consuming and constraining. It may result in a crucial hire not happening, as the candidate is aiming for slightly higher than the pay band, which can be detrimental to performance.
A good rule of thumb is to imagine, if a spreadsheet of all salaries did hit everyone’s inbox, how comfortable would managers be about justifying pay disparities? If the answer is ‘not particularly’ then they should question the value of disclosure. While salaries for senior directors are transparent, organisations need to be confident enough to rationalise salaries across the company and at every level. @PennaPlc
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