Comment roundup on secret salaries vs. open
When I wrote my post on why secret salaries are a baaaaaad idea I didn’t realize what I was getting myself into. On most other posts I’ve written, 3 out of 4 commenters agree - in this case 3 out 4 thought that open salaries are a really baaaaaaaad idea. How many a’s are there in baaaad anyway?
There’s about 60 comments on the post itself, 50 on reddit, 80 on digg and more on other sites, most of which, as mentioned, are dead set against the idea of open salaries.
Interestingly, the comments from people who have tried open salaries are overwhelmingly in favor of the idea - many cite great benefits. I still think open salaries are a great idea for employees, businesses and the bottom line.
I’ve summed up the major arguments from the comments against secret salaries and my arguments against these arguments below, not so much because I want the last word (well, that too :o) but mostly because most of the arguments are really good arguments, many of which I hadn’t thought about before.
No one will adopt it / it can’t be done
The short counter-argument: Some companies have done it. In some cases it’s failed, in some cases it’s worked incredibly well.
Employees would demand more, People won’t demand a reasonable salary, employees overestimate their value
Experiences from companies that have open salaries, including my own, don’t support this. People are very reasonable about it and perfectly capable of realizing that some people get paid more than others.
If I’m good at bargaining and therefore get a higher salary, I deserve more because as a good bargainer I’m valuable to the company
Great! Then make bargaining skills one of the things that count in determining salaries. That way it’s out in the open and not something that counts in some cases and not in others.
People will start complaining
No, people are already complaining, because in many cases they already know who’s making what. Making salaries open means managers will discover that people complain. That’s a good thing because it brings the complaints out into the open where they can be dealt with.
It’s impossible/difficult to set fair wages and difficult to define how salaries are set
Well this is true whether salaries are open or secret. Making them open makes it easier to set fair salaries, because you know what other similare employees are getting.
The company wants to pay as little as possible / Companies can’t pay more
As I wrote in the post, no company has an interest in paying as little as they can get away with. Companies have an interest in making salaries as fair as possible, not as low as possible. And because making salaries more fair can lead to people being happier at work and therefore to increased productivity and quality, it’s actually good for the bottom line.
Your salary is not connected to your co-workers’
That’s actually true. But you perception of how fair your salary is is totally connected to your co-workers’ salaries.
Employees hired during a drought
What do you do if there’s a sudden drought of qualified employees in the job market and you need to hire employees at signifcantly higher wages than existing similar employees?
Embarassment if a person’s salary drops
Well that’s true: If a person’s salary drops it will be taken as an indication that that person is now less valuable to the company. But what’s the alternative? Keep on paying that employee a salary that’s now unfairly high, merely to avoid embarassing an employee? That’s doing everybody, including the employee, a disservice.
The world is unfair
Sometimes. Does this mean we shouldn’t work towards making it more fair?
Salary is a personal matter
I have a lot of sympathy for this argument because in today’s society salary is quite a taboo. It’s not up there with sexual practices, but close. But why is that? Does it need to be?
Difficult to explain why Johnson gets more, You have to explain/defend every raise, Results in a new line of bs from HR
Is it really that difficult to explain why person A gets more than person B? Shouldn’t a good leader be able to easily and succinctly justify her choices?
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ncloud Said,
August 15, 2006 @ 10:52 pm
“Employees hired during a drought
What do you do if there’s a sudden drought of qualified employees in the job market and you need to hire employees at signifcantly higher wages than existing similar employees?”
Why is this even an issue? Companies have no problem gouging people when the supply of their product shrinks and demand goes through the roof — why should they have a problem when the labor market exhibits the same behavior? If people looked at their marketable skills like a copmany looks at its product(s), our approach to employment would be radically different.
Why secret salaries are a baaaaaad idea Said,
August 16, 2006 @ 8:07 am
[...] Comment roundup on secret salaries vs. open Said, [...]
Alexander Said,
August 16, 2006 @ 8:58 am
ncloud: Exactly! And secret salaries simply allow companies to continue these practices.
ncloud Said,
August 16, 2006 @ 3:05 pm
Alexander: And you know what’s funny? Companies try to convince us to keep our salaries secret, and they imply that it is because they are doing us a favor by giving *us* a higher wage than they give other employees — as if we’re privileged. In reality, this is exactly the opposite.
Love the site, BTW — I plan to check out “The Seven Day Weekend” since you recommend it so highly :-)
Alexander Kjerulf Said,
August 16, 2006 @ 8:39 pm
ncloud: Heh, good point, I never thought about that one.
I hope you’ll enjoy Semler’s book - feel free to come back here and complain if you hate it :o)
Stressedmanager Said,
August 16, 2006 @ 10:19 pm
Sounds like both things make salaries a big deal … Keeping them secret sounds strange, having them listed on the Intranet sounds even stranger.
Why make it such a big deal about this? Sure, people will talk in any case, but why not try to de-emphasize salaries, and just get some work done. Salaries are discussed once a year, and isn’t that enough? If people feel they should have more because they heard Bob earns more than them, than that’s ok, and they can make their case when it’s appropriate.
Alexander Kjerulf Said,
August 16, 2006 @ 10:33 pm
Yes! Alfie Kohn’s great work on why salaries don’t motivate people made him give companies this advice:
Pay people as fairly as possible then do everything in your power to de-emphasize salaries.
I actually think that open salaries over time serve this purpose. They certainly did for us and though they were open in our company, they were still only renegotiated once a year.
And there’s always the middle ground suggested by one commenter on the original post: If an employee has a suspicion that he’s not being paid fairly, he can go to the CEO and request to know what others are getting and argue his case.
PJ Said,
August 17, 2006 @ 2:39 am
>Employees hired during a drought
>What do you do if there’s a sudden drought of qualified employees in the job market and you need to hire employees at signifcantly higher wages than existing similar employees?
You give existing similar employees a raise before they decide to go looking elsewhere to get more pay.
Kevin Carson Said,
August 17, 2006 @ 8:29 am
I’ve seen good arguments that free market competition in health care require the free flow of information on pricing; but the health care system is deliberately set up to restrict the flow of such information. Likewise, the internal structure of the corporation is set up to prevent the free flow of information necessary for an efficient labor market. The commenter who said “employees would demand too much,” unfortunately, is channelling the same values that led to the situation.
As for those who said that “life isn’t fair” and the like, maybe not. But anyone at the bottom who finds himself apologizing for the injustices committed by those at the top, should do some reading on Adorno’s F-Scale and the authoritarian personality. Or on a less abstruse level, get his nose out of the bosses’ posteriors–they’re plenty good at looking out for their own interests without some apple-polisher lamenting that “them pore ole bosses need all the help they can get.”
Kevin Carson Said,
August 17, 2006 @ 8:31 am
Or to paraphrase scripture, it may be needful for life to be unfair; but woe to him by whom it IS unfair.
Robert Winter Said,
August 18, 2006 @ 2:14 pm
“..in today’s society salary is quite a taboo. It’s not up there with sexual practices, but close. But why is that?”
I think, that (almost) every pepole is trying to find a place in the hierarchy of the society. So we are measuring each other, and the easiest way to measure - in this material world -, are the wages. If we can keep our income level a top secret, we can aviod measuring, thus we can’t loose. Everybody hates to be a looser - but it’s a stupid philosophy.
Meriblog: Meri Williams’ Weblog » links for 2006-08-17 Said,
August 19, 2006 @ 11:27 pm
[...] business management people happiness) Posted by delicious @ 7:19 PM on August 17, 2006 Permalink Make money fast Xoftspy Make money on ebay T-mac-5 Ways to make money fast make money at homeEarn money Andis Hair Clippers Coffee Table Found money Hair Clippers Making Money Online Mens Shavers Motorola pink razor Pink Razor Phone Razor Phone Transfer money overseas Wahl Hair Clippers Wintasks Detecting spyware Adware Alert [...]
snowleo Said,
September 25, 2006 @ 10:31 pm
Interesting… I read Semler’s stuff some time ago and now in founding a company find myself thinking about it more. Has anyone had experience with this in employees spread out across a global workforce? I recall Semler’s guys were all in one place with the same locational economics (though perhaps no longer in his later work). I realize we could say “Make location a factor!!!”…. Somehow it seems harder to explain why a developing work employee makes 10% of a first world employee than explaining a 10% difference in salary between two colocated employees…
Secret salaries revisited Said,
May 30, 2007 @ 8:40 am
[...] A while back I wrote about keeping salaries secret in the workplace and why I think it’s just a darned silly idea. It’s easily the most controversial post I’ve ever written, with 70% of the (many) commenters disagreeing vehemently. I posted a comment round-up as well. [...]
Bulmafox Said,
June 27, 2007 @ 1:58 am
I absolutely agree with open salaries. I think companies keep salaries secret to keep people in their place. After all, if you don’t know you’re being paid an unfair salary, it makes it hard complain to management or the CEO or–God forbid!–look for another job.
Lee Said,
September 13, 2007 @ 9:14 pm
A gentlemen disclosed a while back that his company suddenly revealed the salary of all its workers and he was displeased with the decision.
Why? Because he was making a ton of money and admitted that he was probably being overpaid and he didn’t want other employees to know that.