A lot has been written about the pay gaps that women and minorities face in the workplace.
It is a very real thing, and something that companies nationwide are trying to figure out. How do we revolutionize old systems? How do you – realistically and ethically – balance the salary scales?
One concept that some progressive companies are adopting is that of “salary transparency”, meaning everyone in the company knows how much money everyone else makes.
There are positives. There are negatives. Here are a few highlights from the article that are worth calling out:
There are upsides for women and minorities – but at a price. It may come as a surprise, but it was the people who were OVERPAID who were most frustrated by this process. It makes sense, though, because underpaid staffers received raises, while the ones who already had a fair salary complained that they didn’t get a raise, too, and that it’s not their fault that they negotiated a higher salary upon taking the job. So in short, salary transparency is not going to “stop salary drama”, and that’s not a reason to embrace it or reject it.
There are suggestions that pay transparency attracts more diverse, passionate professionals. One company actually saw a 50% increase in job applications after deciding to make their salaries public
Employees know where they stand. It’s important to understand that not everyone makes the same salary in a transparent scenario. But by making salaries public, you can look at others, know what they are doing (or not doing) and how valuable management finds their skills. That often lets you know what you need to reach their level – or if what you have to offer won’t be valued in the company’s culture.
Again, I encourage you to read the whole article for more insight into each of these topics. There are several solid learnings any manager or HR department should consider when exploring the idea of salary transparency for their company.