Why secret salaries are a baaaaaad idea

Secret salaries

It’s a golden rule in most businesses that salaries must be kept secret. Except for a few heretics it is almost universally accepted that mayhem would ensue in the workplace if people knew what their co-workers, their managers or – gasp – the CEO was making.

Making salaries open inside a company instead seems like a wild idea sure, but it makes a lot of sense and brings advantages for both the workplace and for its people. Read on to see why.

The case against secret salaries

There are three major reasons why secret salaries are silly:

  1. It frustrates employees because any unfairness (real or perceived) can’t be addressed directly.
  2. They’re not secret anyway. People talk, you know.
  3. It perpetuates unfair salaries which is bad for people and for the organization

Let’s look at each of these.

If Johnson over in production is making 1.000 more a month than I am and the CEO is making 22 times what I’m making, then hopefully there’s a good reason for it – one that I as an employee am entitled to know and capable of understanding. So why are salaries treated as state secrets?

The main reason may precisely be that they’re not currently fair and therefore making them open seems dangerous to many workplaces. Maybe Johnson is making more than me, not because he does a better job, but because he drives a harder bargain when it comes time to negotiate salaries. Or sucks up to the boss. Or has some pictures from the last christmas office party showing the VP of marketing and an intern in… never mind. That doesn’t seem fair, does it? We can all agree, I think, that it makes much more sense to determine salaries based on people’s value to the company.

I have worked at two different companies where salaries were secret and guess what: They weren’t. Most people knew what most others were getting. In one company I consulted for, the IT department had even found the Excel spreadsheets HR kept the salaries in. They knew what everyone was getting.

And here’s the problem: If Johnson’s salary is (unfairly) higher than mine, and secret, I can’t complain to my manager about it because I can’t admit that I know about it. When a company sets up a situation where people can see the unfairness but can’t address it directly, or even discuss it openly, they’re rigging the system for maximum frustration.

Companies must attempt to pay their people as fairly as possible. You might think a company should try to pay people as little as possible, but companies who subscribe to that philosophy must be prepared to steadily lose all their good employees to competitors willing to pay people what they’re worth. A company must attempt to pay each employee a fair salary, ie. one that matches the employee’s skills, the market average and other employees inside the company. In other words, the company itself has a vested interest in keeping salaries fair, and keeping salaries secret makes that nearly impossible.

The case for open salaries

Making salaries public (inside the company of course) has some major advantages:

  1. Salaries will become more fair. The system gets a chance to adjust itself.
  2. It will be easier to retain the best employees because they’re more likely to feel they’re getting a fair salary.
  3. The pressure is on the people with the high salaries to earn their keep. Everybody has to pull their weight – the higher the salary, the larger the weight.

I believe on a very fundamental level that openness is better than secrecy, in life and in business. I’m not naïve enough to share all information all the time, but my chosen approach is “Let’s make everything open by default and only make those things secret that absolutely need to be”. Would I share my list of prospective clients with my competitors? Nah. Would I share it inside the company? Heck, yeah!

So when I co-founded an IT company back in 1997, we decided right from the beginning to make salaries open. We even had a page on the intranet where everybody could see what everybody else got. And yes, this did cause some discussions along the lines of “Hey, why am I getting less than Johnson, my work is at least as good at his”. We took those discussions seriously and we either clarified the difference in salary (eg. “Johnson gets more because his clients are consistently more satisfied than yours”) or we adjusted the salaries to match.

Semco is a Sao Paulo-based company of 3.000 people who’ve gone one step further: They allow employees to set their own salaries. No really, they do! This works only because all salaries are open. I could demand a high salary and get it but I’d better be showing results because people are sure to be watching those who make a lot of money. That’s a business experiment only for the truly daring enterprise, but Semco has demonstrated for the rest of us that it can work.

Ricardo Semler, the owner of Semco said this about the value of discussing salaries openly:

Salaries are a sensitive subject, but open communication is important enough that it should be tested, even if there is a price to pay. It’s at the very heart of a shared culture. If discussion of salaries is taboo, what else is off limits? The only source of power in an organization is information, and withholding, filtering, or retaining information only serves those who want to accumulate power through hoarding. Once an e-mail is not circulated, or if it is edited, then illegitimate pockets of power are created. Some people are privy to information that others don’t possess. Remove those pockets, and a company removes a source of dissatisfaction, bickering, and political feuding.
– Ricardo Semler in his excellent book The Seven-Day Weekend

You tell’em Ricardo. Making salaries open opens yet another pocket of information that the power-hungry would otherwise use to consolidate their positions – to the detriment of co-workers and the organization.

So come on: Make salaries public. Put them on the intranet. I dare you! Why keep them a secret?

There is one requirement for open salaries to work though: Employees must know what factors influence salaries. Are they based on customer satisfaction, hours worked, quality, sales figures, seniority, skills, commitment to the compay, education, etc… What matters when setting salaries and what doesn’t matter? If the company has not clearly stated this, comparisons are meaningless. It is of course management’s responsibility to know and to publicize the factors that determine employees’ salaries.

In our company we decided this together, and we agreed that the most important factors would be customer satisfaction and commitment to the company and that formal education and seniority didn’t matter. We put this in a document on the intranet as well. I can safely say, that making salaries open was one of the best things we did for our company and it almost made salary a non-issue – it was certainly nothing that caused us any frustration or troubles.

So try it: Make salaries open. I double-dare you.

UPDATE: This post sure generated a lot of comments. I love it! I’ve posted a comment round-up here.

If you liked this post, I think you’ll also like these:

162 thoughts on “Why secret salaries are a baaaaaad idea”

  1. Why, oh why do companies live in the perpetual la-la-land that these are secret? I can tell you what everyone within 3 steps of me makes at the company where I work. They have a “If you discuss it, you are immediately fired” policy. Obviously that hasn’t stopped anyone.

  2. If employees had a verifiable way of knowing how much management made, they would startrt demanding a greater share of the wealth. That is why it is made hush-hush by the corporation.

  3. I already know that management makes more than me, I don’t care what other people make and I don’t want to know. If I have more bargaining skills then I deserved to get that extra 1,000 a year. The world isn’t fair. If I were running a company I want salaries secret because I don’t want open discussion or requests for raises all the time on company time. I’m sure you’ll find that salaries in similar fields are comprable to the work involved. The CEO makes 22 times what you do? If you feel like you could do his job then get motivated and become a CEO, even take his job, but don’t expect it to be handed to you.

  4. I would suggest that on the intranet page where everybody’s salary is listed, have a link to their resume, and encourage employees to keep their resume updated. Not only would it silence most of the discrepency complaints, I’ve found that really useful in understanding the skillsets of my coworkers, and it greatly enhances the flexibility of the company.

  5. Do you really think that coworkers will acknowledge that some of their peers contribute more to the company bottom line? Do you really think they’ll appreciate market forces (supply/demand)?

    The guy cleaning the toilets is undoubtedly filling a critical role, and he’s probably damn sure that the piss-ant chair warmers who spend work hours complaining about coworker salaries shouldn’t be making more than him, but he makes a marginal wage because he’s easily replaceable. Similarly, there are people with company or industry skills who make more than you because they’re less replaceable than you, something that management realizes but you never will. They know that they’ll never be able to pound this into your skull, so they mandate secret salaries EVEN IF THEY KNOW YOU’LL FIND OUT. At least it saves them from listening to you complain all the time.

    Open salaries, where everyone can piss and moan to their managers all day long leads to two things — salary “grades”, where roles have tight grades and ensure a homogenous mediocrity, or ENDLESS petitions for raises because Sally over in sector G makes $200 / year more.

  6. There are a few unspoken assumptions required to make the open salary system work. Assumptions which are nowhere near being true. In order to have susch a system you need to have a fair and/or objective way to set salaries. There are three options, all of which fail under scrutiny.

    1. Base salaries on job titles

    People with the same job title and responsibilities (even with he same experience) do not necessarily contribute equally to the company bottom line. Some workers are more efficient, often picking up the slack of others.
    People will not accept that maybe they are not as efficient as some of their colleagues with the same job titles and should therefore should get a lower salary.

    2. Base it Experience (The dreaded resume salary scale)

    Resume in no way predict or assess accurately the contribution an employee will make to the company. This kind of system is what has lead a number of people to spend a number of productive years doing nothing but resume padding, acquiring no skills, contributing nothing but building one heck of a resume.

    3. And finally the worst possible of all salary setting systems, seniority

    Just look at any government bureaucracy anywhere to understand why this is such a bad idea.

    Bert

  7. Knowledge is power and management wants this power in negotiation. Usually most people do not find out other people’s secret salaries.

    If one person is a better negotiator, management does not want that one person’s abilities to give a boost to other people.

  8. I love the concept, however I think there are some difficult repercussions. As the author points out, companies will need to clearly define how salaries are calculated. This limits hiring managers ability to account for factors that aren’t identified.

    A lengthy debate on the subject would be interesting. For example, I think open salaries would do wonders in the battle against glass ceilings for women and different races… a very real problem.

  9. Open salaries are a great idea for the reasons described here. I’ve run companies where we did this and it forces you to set the salaries fairly.

    One of the other commenters mentions that people will get upset when others know that they are making less than someone else who does the same job. This is true (and get truer as the company gets bigger), so we came up with a solution.

    Salaries were open, but not posted. Anyone could go to the CEO and find out what anyone else was making. The CEO was there to explain why and the person whose salary was asked for would be told who had asked for it.

    This allowed people to know about salaries, forced the CEO to make sure they could all be defended, but didn’t publicly humiliate someone who was not where they felt they should be.

    Forced honesty is generally a good principle to build into any system.

  10. Nice article, bad idea.

    There are too many considerations that go into compensation, and they certainly aren’t all tangible. Someone’s ability to market themselves, despite having fewer credentials, and receive a higher salary *is* worth more in many cases. Why?

    Because they can use that skill elsewhere to the benefit of the company.

    If management had to provide indepth explanations as to the myriad of reasons why Bob makes more than Tom, that would not only be a neverending exercise, but it would be wholly unsucessful.

    Well, I have a degree from this school…his is only from that school. I have this cert and he doesn’t. Customers like me; they hate him. He doesn’t even show up to work on time…

    All these things have various associated values that depend on the organization, the managers making the decisions, and the employees themselves. The problem is, the employee’s opinion doesn’t matter.

    That’s where you’ve gone wrong. It’s not up to them to decide how much these things are worth. It’s not up for discussion. If it becomes so, then it’ll become *the* topic of debate in the workplace.

    “I think x should get more than y. Bob doesn’t even do paperwork, and he makes z more than I do.”

    It’s a nightmare. Seriously.

  11. Dennis (above) has said it best and I second it.. almost word for word, this is what I was going to say to this not well thought out blog entry.
    (I suspect all liberals will agree with the poster and conservatives with me & Dennis)

    While “equality” is great in theory, it hardly ever equates in the real world.
    People who believe in absolute equality never see anything besides black and white.. they promote their ideas as “progressive” but they are actually simplistic and not well thought out.

    Here is what Dennis said (from above) and I mean every word of it.
    :>

    >>”Do you really think that coworkers will acknowledge that some of their peers contribute more to the company bottom line? Do you really think theyll appreciate market forces (supply/demand)?

    ** UM NO, NOT IN A MILLION YEARS THEY WON’T **

    The guy cleaning the toilets is undoubtedly filling a critical role, and hes probably damn sure that the piss-ant chair warmers who spend work hours complaining about coworker salaries shouldnt be making more than him, but he makes a marginal wage because hes easily replaceable. Similarly, there are people with company or industry skills who make more than you because theyre less replaceable than you, something that management realizes but you never will. They know that theyll never be able to pound this into your skull, so they mandate secret salaries EVEN IF THEY KNOW YOULL FIND OUT. At least it saves them from listening to you complain all the time.

    ** YES, ALL THE TIME, AND CALLING THE ATTOURNEY GENERAL AND THE BBB AND ON AND ON….****

    Open salaries, where everyone can piss and moan to their managers all day long leads to two things salary grades

  12. I would love to see this.

    I think the bit about holding people accountable in a public eye makes the most sense. If people know their peers know what they make, then they will really try to earn it.

    Good read.

  13. Compensation in large companies is hard, and the answers are never as simple as “just open everything up”.

    The company generally wants to retain as much productive talent as it can for the minimum amount of money (the company that doesn’t is betraying its shareholders).

    Some employees value things beyond maximized salary; nice hours, good benefits, relaxed work environment, whatever. Other employees are coldly rational about their monetary compensation. They’re going to work at the job that pays them the most.

    The company wants to keep both these types of people. But it can’t do that if it’s going to be forced to pay absolute top dollar for every employee. All else considered, the company that “normalizes” salary by productivity is going to pay an ambitious employee less than she could make at a company that doesn’t do that. Some talented and ambitious candidates won’t even consider a company with “salary bands”. That sucks for the company; those people are valuable.

    In market-driven companies you are generally going to make what you can sell yourself for. This isn’t a bad thing; it creates an huge incentive for team members to differentiate themselves. The alternative is planned economy.

    At the end of the day, your salary is between you and your employer. If you are worth $10,000 more a year, that fact has nothing to do with what your co-workers make. You should be able to convince management that they will lose by allowing you to leave the company over your salary. If you can’t convince management of that, management is either dumb (not unlikely) — in which case no amount of “compensation management” is going to fix your solution, or you’re dumb (also not unlikely) and should be happy with what you get.

    One possible solution that management can employ to get around nosy employees is to keep salaries relatively normalized, but offer incentive compensation (stock, bonuses). I know what Joel Spolsky thinks about this (incentive pay is counterproductive because nobody ever feels appropriately rewarded). But if your company can’t reward employees appropriately in a performance review, it probably can’t reward them appropriately under any other circumstances.

  14. I run a business.

    In a perfect world, we would be able to share everyone’s salary.

    But this world isn’t perfect.

    Here’s an example:

    A few years ago, we had a local drought in the market for certain positions. As a result, we had to lure employees to relocate. The only way to do that was to offer relatively higher salaries than the norm. Not much more, but noticable.

    Since then, the drought has ended. Now we are able to hire equal employees at more reasonable salaries.

    So we are in a position where we have several employees who are, in effect, overpaid, due to market conditions. We also have many more equally talented employees who are paid several thousand dollars less.

    It is practically impossible to ask employees to accept lower salaries, and we wouldn’t presume to. Those contracts were hammered out at the going rate, and we’ll honor them.

    In an open salary system, the only “acceptable” solution would be to raise everyone’s salary to the same over-priced level.

  15. What do you do if someone’s performance drops? Do you cut salary, withhold raises, threaten firing and follow through if things don’t improve?

    Beyond causing a sense of injustice between unequal-salaried employees, another reason I can see for keeping salaries secret is to prevent undue embarassment for those whose performance drops or stagnates over a review period. If Joe Salesguy’s salary drops or stays level, everyone from VP Bob to Bill the doorman knows why (or think they do).

    That’s darn embarassing, and potentially unfairly so, if there were extenuating, but private, circumstances. And while a little shame _can_ go a long way for improving performance of slackers, that really depends on the person’s personality. Mental anguish, anyone?

    I like the idea for it’s openness and honesty, but I see so many places where it would be difficult or impossible to implement this without a lot of “casualties”. No large corporation I’ve been acquainted with would be able to implement this. They are too invested in hiring anyone and everyone, and then relying on their internal processes and infrastructure to cover the incompetencies of their employees. And incompetent employees are the ones who would suffer greatest from open salaries.

    I understand though that you’re directing this at small businesses, startups, etc. I am cautiously optimistic at the suggestion.

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  17. Followup to my previous comment. After a little thought, I propose an alternative to completely open salaries.

    Instead, just let people decide for themselves if they want to share that information. Employees are free to disclose their own salary and no one else’s. The only time a manager can disclose anything about someone’s salary is to verify the correctness of what an employee has claimed.

    Some people are sure to be open, while others will be more reserved, and it will depend on the situation for each person. This seems most fair to me. Everyone will know that any salary that remains undisclosed is because of that employee’s personal decision. And this way their reasons remain private as well.

  18. Ron: You mean to say that you and your co-workers reveal your salaries in clear violation of company policy? I’m shocked :o)

    Sosuke: That’s a commendable attitude. The important thing is that you think you’re paid fairly.

    Erik, chris, Art: Excellent suggestions / modifications to complete openness. Your ideas show that it doesn’t need to be all open or all secret.

    Joe: I see your situation – it is tricky. The question is: Don’t people inside the company already know that the guys hired during the drought are paid more? if they don’t know can you continue to keep it a secret? If it eventually will come out, might it not be worth it to address this issue sooner rather than later? I’ve always believed that open resentment is better that hidden, suppressed resentment because than you can do something about it.

    Paul v: Exactly!

    Thomas: Great arguments! I still hold that the company’s interest is not in paying as little as possible. THAT would be a betrayal of the shareholders because it would mean losing all the good employees. It is in the company’s interest to pay employees as fairly as possible, not as little as possible. Secret salaries make this more difficult. I’m not saying that making salaries open is without problems – I’m suggesting that maybe it causes fewer problems, especially in the long run, than secret salaries do.

    Frank, George: Thanks for the kind words!

    Daniel: I suggest that management sets the parameters that determine pay. Then employees know what they’re judged on and have some insight into why this person is paid more than that person. Just having that discussion on what should count when setting pay and what shouldn’t can be a huge eye-opener and for great benefit.

    Bert: All the methods of calculating salary you mention are indeed hideous but there’s at least one more way to determine pay: By what you’re worth to the company. The more you’re worth, the higher your pay. That’s what we did in our company, and while it’s not an easy thing to estimate it’s the most fair.

    manjusha: Many companies seem immensely reluctant to try many things that make complete and total sense. They prefer business as usual. The companies that do try open salaries generally tend to like it though.

    Dennis: Absolutely – if your main objective is to avoid complaints from employees then secret salaries make perfect sense. You could actually make THAT the rule: Employees may discuss salaries between themselves, but may not complain about them to management. That would be honest :o) Seriously: I still believe that open salaries don’t result in more complaining – they bring complaints out in the open where they can be dealt with, which fater some time results in fewer complaints and more happiness at work.

    joe: I hadn’t even though about the glass ceiling but you’re right – this is one way to reveal gender-based differences in salary. Thanks!

  19. >>”joe: I hadnt even though about the glass ceiling….. ”

    REALLY?
    HONESTLY?
    I Highly doubt that…

    It seems your thought process is a little on the “liberal” side of things and by that I mean “equality for everyone is a good thing” type of attitude.

    (no offense meant toward you personally….ok?)

    Equality and openess in salaries is NOT a good thing and never will
    be unless you work at Burger King. (and even then it’s iffy)

    My Thoughts…

    1. You are assuming everyone is equal and will contribute equally and therefore deserve “equal” compensation.

    >> This will never be the case. we are not equal creatures (see below)

    2. Women deserve the same pay as men: NOT true.

    Well, thats inflammatory.. What I mean is it’s true and not so true.
    This goes back to # 1

    If the woman in question contributes more to her job than a male counterpart, she deserves MORE, if not.., she deserves less, anything different allows a male to slack off and a female to “have to work twice as hard” (which we hear SO often) or vice versa

    3. This way of thinking is just another push to the “warm and fuzzy” feelings many of us today seem to need. “Every one is equal.”

    I have a newsflash for everyone…we are NOT all equal, we will never be.

    I am not talking about skin color, gender or sexual orientation.. I am talking about the employable quality of humans; we have different levels of employee quality.

    Some of us are lazy bastards that surf the web all day and do as little as possible (and then bitch about salaries)
    Some work tirelessly for no other reason than their work ethic.
    Some are selfish.
    Some are selfless.
    Some are a mix.

    Sally comes into work every day and works on the corporate website processing; she produces about 35 pages of code each day, every day. She thinks up new ways to streamline data coming in from the internet and how to make it all connect in the back office.
    Sally works an average of 45 minutes more than Ron each day.

    John, Fred and Randie all do a decent job but put in less “work” than Sally, each producing between 10-20 pages of “code”. They are generally on time and do not work late or leave early. They are “team players”, but do not do much beyond what they are assigned.

    Ron, the supervisor, comes in 10-15 minutes late each day and slips out on average of 30 minutes early. Ron checks up on the coders work of yesterday by viewing the results in his cubicle at 10AM, he is finished with Sally’s at 10:15 (as he is everyday because Sally rarely makes a mistake), he spends 15-30 minutes reviewing the work of his other 3 coders.

    Ron gives his boss Joe a verbal report on his 4 coders each day at 4:15
    Ron users the other 6 + hours to make personal calls, surf the web and make googlie eyes at Sallys “Sweet Ass” when she goes to the ladies room.

    Ron makes 85k
    Sally makes 35K
    John makes 27K
    Randie makes 33K
    Fred makes 46K

    Who is more valuable to this company? Should they all get equal pay? Should Ron the supervisor get paid LESS?

    If you think you know the answers without needing to know anything more about the company.. you are a dumbass.

    You do NOT know the situations, the personal connections, the lack thereof, the interaction, the needs of one on the many, the cog, the hub, the wheel, how things work there, how they do not.
    You do not know Sally’s emotional state, when she was hired, when Fred got his raise, what he did to get it…

    Equality would not work here and releasing salary data would bring cries of equality from almost everyone. That would disrupt the entire company and workflow.

    Try telling someone they are not worth as much as someone else because they don’t work as hard or their “intrinsic” value is higher..
    see how fast you get sued.

    Get it?

  20. Eric G: I not only think Ron sounds wildly overpaid, he sounds like he needs to look for employment somewhere else – preferrably with a competitor.

    To make it clear: I’m not advocating equal salaries, just open salaries. Your claim that open salaries would lead to a demand for equal salaries doesn’t sound right to me.

  21. I’ve first hand experience of sharing salaries and performance reviews in the Netherlands – all salaries were public knowledge – it didn’t have any effect – the HR department just got good at feeding a different line of bs: “Really your capability based against Rene’s is only your opinion – we had Rene in here yesterday claiming he had a right to an even larger salary because he has far more seniority than you ” – so we were all left with the same feeling of helplessness but now mixed with a bit of personal animosity to your coworkers – and with respect to evaluations . . . it got silly – over time they removed any topics that seemed contentious because it caused morale problems (translation: work for HR) – so we had “Able to avoid Conflict” in two different places so people like me would be hosed – and “Showed Leadership Capabilities” in another place so worms like Rene would be hosed and we all ended up getting a “Very Good”. Very democratic – but ineffective.

  22. if you make salaries open all it actually does is invite dissent and hurts productivity. Yes in a perfect world everyone gets paid exactly what they deserve, but we all know this world is unfair, so deal with it. The only way to keep people happy in this particular sector is to keep them in the dark about others salaries, it’s a private agreement between you and the company, there is no reason for anyone else to know. If managment does not know how to manage their budget on salaries, that is their problem, not yours.

  23. You may want to checks the laws in your state. Some states have made it illegal for companies to restrict communication of salaries. I worked in one company in Colorado that ran afoul of such a law. :)

  24. Amazing concept! It makes so much sense! I can’t wait to table this and get feedback. This might just turn our office around.

  25. One of the most liberating things I derived from becoming an independent consultant was that I no longer fretted over salary decisions. I’m paid now what the market supports… some years that is more, some years it is less. Some other consultants make more than I do; some make less. But the liberating part is that I’m not concerned about whether my next raise is going to be 3% or 4%; what the person across the aisle makes is of absolutely no concern. Wasn’t it Ben & Jerry’s that adopted the philosophy that the top salary in the organization could not be more than 6 times the bottom salary? I don’t know if they still do that, but it at least mitigates the ridiculous executive salaries that have given many corporations black eyes. Secret vs. open is a myth that corporations maintain. As long as employees have mouths, eyes, and ears (among other input devices), salaries will never be completely secret. Awesome post and fantastic discussion!

  26. I’ve liked this idea and advocated it for years. You do a good job laying out the rationale and benefits. That said, there are some real down sides. I think the value of this approach is most apparent in an organization where management is percieved has having a significant lack of fairness — generally in areas beyond salary/benefits.

    I’ve been in organizations where it’s was clear that the behaviors that were being rewarded were clearly counter to the stated goals/values of the group (even the nebulous quality, customer satisfaction, etc.). Bluster & ego got you a lot farther than good work & good revenue. A disfunctional situation like this is principally perpetuated by secrecy since, in any rational terms (or even any terms they’re not embarrassed to relate), management can’t justify the salary situation. Without secrecy, personality, preferences, and bias are much more likely to see some harsh light and specific crticism.

    That said, in organizations that are not so disfunctional, where management really is fair and justified in its decisions, secrecy can be beneficial — Joe Said’s example is a perfect illustration. There is a human element to salary negotiation, there is an acceptable lack of parity for equal performers. With everything laid completely bare, otherwise good management spends a lot more time juggling the system and justifying it.

    So, secrecy (or at least a lack of official publilcation) is OK, if and only if management has and can maintain trust of the employees. There are all kinds of ways that management’s fairness becomes apparrent outside of salary discussions. Good management will take advantage of those situations both because it’s helpful to it’s management’s goals and because it’s a good and fair way to deal with people.

  27. There is no formula that translates what a person does directly into an indisputable dollar value.
    That is the problem.
    The solution is secret salaries.

  28. Alexander,

    You could never, ever come up with a formula that calculates the true worth of an employee to the company.

    If you measured employees largely by senority, you end up with a workforce who do just enough work not to get fired – their salaries just increase over time.

    If you measure employees by work habits, you end up with a workforce who spends all their energy giving the appearance of hard work, and less on actual work. And it discourages innovative thinking.

    If you measure employees based on anything outside their direct control (the company’s overall profits, the profitability of the project they are working on, whether a project ships on time), then employees will start to believe that nothing they do has any impact on their salary.

    For instance, if you are paid based on if your project ships on time, and the client changes the specs at the last minute which causes you to lose your ship date, you will be demotivated and perhaps angry at the client.

    Now ideally you will want an employee that is punctual, strives for self-improvement, doesn’t call in sick, delivers on time, works on profitable clients, owns up to their mistakes, goes the extra mile even when its not called for, etc. — but you could never create a financial formula that is fair, because something will always happen that will penalize an employee financially when it’s not the employees fault or reward an employee when they had nothing to do with it.

    And so sometimes life is not fair. Sometimes Angelina Jolie does pick Brad Pitt instead of me. Sometimes the CEO only shows up at the office 100 days a year, and he still makes 5 times more than me.

    Sometimes in striving to be fair, we are actually being the most unfair.

  29. When I worked for the federal government I made a point of telling people what my salary was if they asked or challenged me. I was paid good money – upwards of $60,000 a year – for leading consultations on a broad public policy process. When disgruntled members of the public would ask me how much their tax dollars were paying me, I would tell them. That was a little shocking for most people to hear that kind of honesty, but I would go a step further and invite them to complain to my boss if they feel they weren’t getting their money’s worth.

    No complaints. Only a few requests to work harder, which I usually did out of respect to the public.

  30. Or, perhaps, I just don’t want to share that info as it’s not anyone else’s business. Only my employer, accountant, and wife know what I make – and that’s the way I want it.

  31. If everyone were shown the salaries and allowed to set their own, I assume that all my fellow workers who do similar jobs would probably set an amount that is at least fair, maybe a bit more than fair! So I would find the lowest of them, and pick a number $1,000 lower. That way, if I have an unproductive day, people will say “well, he is the lowest-paid of the lot,” and if I have a productive one, they will say “he is worth more than that,” but either way, I get a salary that is pretty close to what is fair, and that is enough. :)

  32. One option is to disclose where you stand relative to your peers, without disclosing their exact salary.. that way, you get the information you want, without jeopardizing the privacy of others… this would work better in a bigger company rather than startups, I suppose.

  33. WE FACED THE PROBLEM WHEN THE MARKET HAVE A GREAT DEMAND
    BUT WELL-qualified personell is not ready to give all knoledge for so small salaries. LABOUR FORCE INCREASING in value but market is not
    ready for this desbalance. EU gives us new threads of competition. THIS SITUATION IS VERY DIFFICULT FOR FOR ALL FORMER USSR CONTRIES.
    SO WE HAVE TO KEEP IN BIG SECRET OUR WAGE OFFER TO ATTRACT
    WORKERS. http://WWW.LANDED.RU



    ?????? ???????????

  34. Know a local company that used open salaries and also had employees set their own salaries. This entrepreneur took it further and had an open finacial books policy where employees had to look at the financials of the company and understand them. Each employee had to justify their worth, understand their own cost to company, and think like an owner.

    The company is still described as the best company in many different ways 2+ years after the entrepreneur decided to use his exit strategy. Other companies in that sector are still copy catting the entrepreneurs best practices and not really achieving the desired results and the employees of the bought out company now all hold high ranking jobs with some of the biggest companies in the industry.

    It works if done correctly. It kills a company if done incorrectly. There is no middle ground on this one.

  35. Alexander, that is where you are absolutely wrong in this article….
    you proved my point completely

    >> “Eric G: I not only think Ron sounds wildly overpaid, he sounds like he needs to look for employment somewhere else – preferrably with a competitor”

    Here are the details you DIDN’T know…

    Ron is the ONLY guy capable of reading and testing 95 total pages of code in a few hours and instantly be able to point out mistakes or “bad” code.. He is a human debugger.
    The company previously had to hire 3 people to do what Ron can do in just a few hours. By having Ron (for all his slackerness) the Company saves over 25K a year.

    Ron is a genius and he can spot this stuff instanly but lacks the creativity to do it himself.. So is he still no longer valuable to the company?

    This is what I mean..

    OPEN Salaries are a bad idea, everyone would assume.. (as you did) that Ron wasn’t worth the paper his checks were printed on.
    But in this case, he most certainly is…..

    Get it yet?

  36. Welll in Norway for 3 months every year you can look at anyones tax returns….so this is possible to know what people make.

  37. There shouldn’t be any salaries at all, at least not capped ranges. Why not? Because the main goal of a business is to make money. If you can save millions in the cost of the operation or add millions in revenue, then you deserve a share of that. It’s all about adding value.

    If you get paid a full-time wage, why bust your ass and fight to push your ideas to “upper management” so the company will make millions and you won’t see a dime. It doesn’t make any sense and companies should wake up and realize this. This is why many people keep their best ideas to themselves and spin off their own companies.

    Pushing ideas or getting management to listen in most big corporations is futile.

  38. Thanks again for all the great comments, people – I really appraeciate the input!

    Steve: Thanks for the story! Your example definitely illustrates how not to do it. If the company is not prepared to honestly evaluate salaries, but only to feed employees a new flavor of bs, then it’s better not to do it.

    Jon: I don’t think it so much invites dissent as it uncovers what dissent is already present and gives the company an opportunity to deal with it rather than let it stew for a long time. I’ve always preferred to get disagreement out in the open.

    hanuman: Good point on the law stuff.

    mofino: Glad you liked it. Let me know how it goes!

    Rich: I see your point. But couldn’t you argue that in organizations where trust is present, making salaries open would cause far fewer problems? Management would have to spend less tme justifying various salaries, because most employees would just assume that a trusted manager knows what she’s doing in setting that salary.

    impossible: I agree, a formula is impossible. But you can still try to make salaries as fair as possible, even though some degree of subjective judgement will be inevitable. But this is true whether salaries are open or secret and open salaries will reduce unfair subjective judgements.

    Chris Corrigan: Nice example – pretty brave of you!

    mica: I agree. Salary has for a long time been a taboo topic and that is hard to change. But does it really need to be? Why is salary such a personal subject?

    Dan: I like your strategy. And it shows that for most people it’s not the absolute figure that matters – its’ whether the salary is considered fair.

    Anon: Good point and another good compromise between totally open and totally secret.

    landed.ru: I see how business in eastern europe can have special issues as their economy develops. I don’t have enough insight into this market to know whether open salaries would help or hurt.

    Deon: Thanks for the case story! And I agree: This is not something you undertake lightly. For one, it’s kinda hard to go back on.

    Jeff: Thanks for the Norwegian update. Don’t they also do that in Finland?

    Eric G: I agree completely that salaries should be set based on performance/results. A good manager would have no trouble explaining to the company why Ron gets the pay he gets. In fact, it might even do Ron some good and gain him some respect in the company to have his high salary justified publicly, rather than have me and everyone wondering why the lazy, shifty SOB is so overpaid.

    Enzo: Companies that share their profits with the employees in one way or another consistently find that this increases happiness at work, motivation, productivity, quality and customer service. And that is one reason people go it alone. Another reason is of course the basic human urge to create something all your own.

  39. Just wondering whether there will be a corrective force or will salaries just spiral out of control. Also, during a recession, will there be a “price war” between existing employees? Human psychology can be so difficult to predict sometimes…

  40. We are in our third year, and our salary info is open to all. All are based on the volume we do, and is then broken down by job function. Each two years the salary is reviewed by each person and the president. It is adjusted if needed, and the argument surports it. Not one argument has come up.
    We also include a mandatory financial advicer(paid by the company) to review goals set by employees before an argument can be made. This has resulted in more earnings, profits for the employees. Its not what you make, its what you spend theory. Our employees know what to do with their hard earned money. It has worked for us, and we receive more application then what we know what to do. Most job seekers tell us they want to work for us because we are open. And the financial advice makes them rich.

  41. I disagree. Except in the case where everyone gets the same salery (Virgin Records did that in their younger days).

    Dave Matthews band is doing the same thing for all the band members, and I don’t see why small computer outfits shouldn’t be doing the same.

    Back in the day, we were awarded warrants in the company I was working. Turned out to be a total disaster. Only “key” personell were awarded – the conclusion being that anyone who didn’t get any were NOT key personell, so why on earth should they care what happens to the company.

    If you want “world domination” you need ALL workers to care, and push in the same direction.

  42. I’ve thought for years this would be a good idea.

    Just one recent example, my wife works in a company where she is paid a “good” salary. However, she hasn’t gotten promoted or received a raise in years. Whenever it comes up the explanations are always vague and the benchmarks are always subjective, and she is utterly demoralized by her non-progress.

    MY theory is that she was hired in the dot-com boom era and paid more than people are now. When raises or promotions (with their implicit raises) are discussed (among her management) they just don’t want to give her a raise since she’s paid “too” much now, whether or not she’s qualified for promotion. But none of this gets discussed openly and certainly not directly to her, and she continues in limbo.

    If salaries were open, then that issue would be on the table as part of the deliberations, and it might even be acceptable to at least *talk* about giving her a promotion with no raise to keep her in line with other employees.

  43. I was sending news and information to a handful of engaged employees. I only sent information that was published about our company or our key competitors as I found it online. I did not filter anything, I provided links and the first paragraph or so of information. If it was provocative enough then people read it and we could talk about it over lunch or when we ran into each other. It stopped shortly after I linked to the executive’s salaries. I was given a stern speech and told to let my work die out slowly. Where did I get this information? On Yahoo! Finance. We are a publicly traded company so we have to file that information and I simply pointed out that we had a new filing. The top executives were supposedly super pissed off at me for exposing them to employees who were clearly paid so much less. However, we had a record-breaking year and my comment when I sent the link out was about how little they were paid compared to other executives I had worked with prior to coming to my current employer…

  44. Darin: I like the way you share interesting info – great idea.

    So management got worked up over you spreading information that is publicly available? That seems just a tad silly :o)

  45. Most of you are forgetting the fact that all large companies don’t give a rats patoot about their employees. Yes, I made a very large generalization here… it is true nonetheless.

    If you can truly say that you are irreplaceable, that there is not another person on this earth that could ever do your job, then you are a mighty fine CIRCUS ACT. Good luck with it.

    What was it that a former boss sent to the whole company… “Drop a rock in a bucket of water, see those few splashes that came out of the bucket? Now look back at the bucket, see any difference in the level? You are replaceable.”

    Salaries will never be “open”, for one reason. Employees don’t matter enough for the employers to care.

  46. I have a question, can anyone help? On our contracts, we are supposed to work 39 hours a week (excluding lunch hours).

    So we all come in at 9 am and leave at 6 pm. But since we are supposed to work 39 hours only, we supposedly can leave at 5 pm one day of the week.

    But of course nobody does and everyone works until at least 6 pm five days a week.

    According to instructions, “of course” we can leave at 5 pm one day of the week….we just need to inform our supervisors first.

    I of course also work until at least 6pm everyday, but sometimes, there are things that I wanna do that I want to leave early for.

    Should I really not ask eventhough I am entitled to it? :(

  47. HappyCamper: I think you’re right. But slowly becoming wrong :o)

    The thing is: Corporate culture is changing as companies face a need for more creativity and better service. You only get this from people who like their jobs.

    While what you’re saying used to be the rule, this will change more and more over the next 10-20 years. And even faster if we do something about it ourselves – like leave the bad companies and go work for the good ones. They DO exist.

    Jim: I believe that’s in Norway (or maybe in both countries). In any case, it shows that other people knowing your salary is hardly the end of the world :o)

    Office lady: I posted your question as a separate post here:
    http://positivesharing.com/2006/10/ask-the-cho-implied-overwork

    I hope that’s helpful!

  48. we `d like to open new theme . Why we keep in secret our salaries we
    told but how can we find investor for our project .It is more complex..
    Project: the East is the West and the West is the East (the past and the present of Ukraine)

    East is East, and West is West,
    and never the twain shall meet.
    R. Kipling

    The urgency of project is caused by the searches for the bases of the mutual understanding of the cultures of Confucian, Buddhist, Islamic, Christian regions and to the solution of the problem of integral safety and steady development of global civilization.
    From the lifetime of Tripoli’s culture (5-3 thousand years B.C.) the interpenetration of the cultural codes of the East and the West, the South and the North occurred in Baltic – Black Sea`s region, in which Ukraine occupies a central place.
    Business

    Content of the project: the political, cultural, religious, lingual, ethnic history of Europe’s peoples and their neighbors .

    The purpose of project consists of the disclosure of the historically caused integrity of global civilization, in spite of the cultural, religious, lingual, ethnic variety of regions.
    * General symbols of the civilizations, which existed in Asia, Africa, Europe from the end of 4 thousand B.C. prior to the beginning of 2 thousand B.C.
    (In’-Shan, Kharappa, Schumer -Accade, ancient reign of Egypt, Crete -Mokena, Tripoli);

    -the special features of ideas about the universe (cosmology), the sense of existence in the universe (ethics) and the society (morals) in the regions of the influence of Indo-European, Altai, Afro-Asian lingual families; the factors of the stratification of society on the Etna- religious criterion; the factors of the division of knowledge to the true, the sacral, the esoteric and the profaned, as well as the exoteric and the applied; the creation of sacral written languages by Brahma, Sanskrit, Avestic, Hebrew, Ven, Iyeratich, Crete`s, Tibetan, Cyrillic alphabet;

    -the period of the decline of early civilizations, coincided with the migration of the Indo-Europeans, the Turks, the Semites (17-12 century to A.D..); the period of formation and decline of Chou, Bkharatavarsha, New Babylon’s reign, the Middle reign of Egypt, Middle-Persia, antiquity (13th century to A.D.), of Byzantium empire, Western Roman empire, Kasha’s empire, empires of Khan’, Maur’ya, (1-8 century);

    -the reciprocal effect of Buddhism, confucianism, Christianity, Manichaeism , Zoroastrianism, Islam in the Khazarsky khanate, the caliphate, Kiev Russ (5-10 century); the separation of Kiev Russ into the right-bank (eastern) – and left-bank (western) (11 century), the domination of Orthodoxy and Islam on the left bank, Catholicism and unions on the right bank (12-16 century) political, economic, religious factors of the formation in Rech Pospolitaya the culture of Ashkenazi (14-17 century), the cultural, educational, ethnic policy of the Russian Empire and of the Soviet Union (17-20 century);

    -the political, cultural, religious, ethnic stereotypes of the southeastern, central, northwestern and southwestern regions of Europe (20-21 century).

    The film is to be finished in feb/2007th and think will be very attractive for common people . (3D animations, good screen and so on). We forecast attractive commercial effect. So could you inform us the possibility to take part in creation this very important project?

  49. we `d like to open new theme . Why we keep in secret our salaries we
    told but how can we find investor for our project .It is more complex..
    Project: the East is the West and the West is the East (the past and the present of Ukraine)

    East is East, and West is West,
    and never the twain shall meet.
    R. Kipling

    The urgency of project is caused by the searches for the bases of the mutual understanding of the cultures of Confucian, Buddhist, Islamic, Christian regions and to the solution of the problem of integral safety and steady development of global civilization.
    From the lifetime of Tripoli’s culture (5-3 thousand years B.C.) the interpenetration of the cultural codes of the East and the West, the South and the North occurred in Baltic – Black Sea`s region, in which Ukraine occupies a central place.
    Business

    Content of the project: the political, cultural, religious, lingual, ethnic history of Europe’s peoples and their neighbors .

    The purpose of project consists of the disclosure of the historically caused integrity of global civilization, in spite of the cultural, religious, lingual, ethnic variety of regions.
    * General symbols of the civilizations, which existed in Asia, Africa, Europe from the end of 4 thousand B.C. prior to the beginning of 2 thousand B.C.
    (In’-Shan, Kharappa, Schumer -Accade, ancient reign of Egypt, Crete -Mokena, Tripoli);

    -the special features of ideas about the universe (cosmology), the sense of existence in the universe (ethics) and the society (morals) in the regions of the influence of Indo-European, Altai, Afro-Asian lingual families; the factors of the stratification of society on the Etna- religious criterion; the factors of the division of knowledge to the true, the sacral, the esoteric and the profaned, as well as the exoteric and the applied; the creation of sacral written languages by Brahma, Sanskrit, Avestic, Hebrew, Ven, Iyeratich, Crete`s, Tibetan, Cyrillic alphabet;

    -the period of the decline of early civilizations, coincided with the migration of the Indo-Europeans, the Turks, the Semites (17-12 century to A.D..); the period of formation and decline of Chou, Bkharatavarsha, New Babylon’s reign, the Middle reign of Egypt, Middle-Persia, antiquity (13th century to A.D.), of Byzantium empire, Western Roman empire, Kasha’s empire, empires of Khan’, Maur’ya, (1-8 century);

    -the reciprocal effect of Buddhism, confucianism, Christianity, Manichaeism , Zoroastrianism, Islam in the Khazarsky khanate, the caliphate, Kiev Russ (5-10 century); the separation of Kiev Russ into the right-bank (eastern) – and left-bank (western) (11 century), the domination of Orthodoxy and Islam on the left bank, Catholicism and unions on the right bank (12-16 century) political, economic, religious factors of the formation in Rech Pospolitaya the culture of Ashkenazi (14-17 century), the cultural, educational, ethnic policy of the Russian Empire and of the Soviet Union (17-20 century);

    -the political, cultural, religious, ethnic stereotypes of the southeastern, central, northwestern and southwestern regions of Europe (20-21 century).

    The film is to be finished in feb/2007th and think will be very attractive for common people . (3D animations, good screen and so on). We forecast attractive commercial effect. So could you inform us the possibility to take part in creation this very important project?

    more at info@landed.ru request

  50. @Eric G:

    great post and I myself always think “secret salaries” are more natural. yet if you have a transparent salary system that is easy to understand, wouldn’t that work?

    probably a very low flat base salary for everyone with defined rules/goals for getting more (in the best case: requires people to work together/share information/etc.etc.etc.)

    ?

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  52. As zeroization indicated, where there is an information asymmetry, there cannot be an efficient market.
    As respondents too numerous to enumerate have indicated, people talk anyway.
    Apparently (as of when I read the comments) nobody had discussed the likely presense of disinformation in such gossip.
    It is a well known fact that an important reason some employers demand “salary requirements” from applicants
    is to see whether they are informationally plugged in enough to know the going rate for the duties described.
    If they ask for “salary history,” one can only assume they’re amassing a collection of information mixed with disinformation,
    that they feel they have some use for. T. H. Ptacek informs us that you are generally going to make what you can sell yourself for.
    The strategy for pricing anything involves knowing the going rate, which is an adversarial process, because information does
    not want to be free. Neither, it seems, does confidentiality, in either its individual (privacy) or institutional (secrecy) forms.
    It seems you will be flying blind if you are “above” indulging in gossip, including illicit gossip.
    It also seems you will be disinformed if you take any gossip at face value, or for that matter information from official sources.
    Our host Alexander has informed us that IT knows what everyone makes.
    It seems the strongest incentives are for cultivating the skills of salesiness, bluffing, gossip, disinformation and espionage.
    Perhaps those employers whose stock in trade includes competencies not listed above could indeed benefit from some degree of institutional transparency.

    Exchange is that sphere of human activity in which no good deed goes unpunished.

  53. WE agree with Lori that all info even regarding labour pricing and rates
    trends should be not free. But, for instance, such big companies like Procter&Gamble, Coca-Cola are testing annualy a great number of potential employees and do not open salary level for applicants . They
    do research in Human resources and make right choice but the small
    companies have to believe in official statistic info and operate with great
    disadvantages.

  54. great piece of posting – some of the secretiveness has started to lessen with the advent of web services like http://www.salarybase.com where people share their package and get the relevant stats. Given the state of the web (in addition to what you mentioned simply about people talking) it’s almost inevitable that orgs will remove the secrecy of the data

  55. I BELIEVE ALL THOSE OPPOSED WOULD FEEL COMPLETELY DIFFERENT IF "SECRET SALARIES" EFFECTED THEM IN A NEGATIVE WAY! says:

    I never really had a problem with salaries being secret until last month. I always felt like it was sort of silly that companies made such a big deal about it. I started working for this company & busted my ass in a position that was really meant to be two positions. I was salary & worked at least 55 hours a week. After a while I received a promotion & the company hired two girls to take over my position. Girl #1 was hired for one position & she was & still is fantastic. After some time she received a promotion as well, for the same type of position I had been promoted to, just in another territory. Now, girl #2 sits at her desk all day long & instant messages, talks on the phone, organizes her children’s sporting events. She isn’t given any projects to work on, or any significant amount of work or responsibilityb/c it would be incorrect or done poorly.

    In the meantime, I’ve been performing my new job for 6 months, but still haven’t received my promotional raise. But, no worries b/c evaluations were coming up, which is when I was going to get my raise & girl# 1 was going to get hers as well.

    I would say about three weeks before the evaluations, Girl #2 proceeds to tell me & girl #1 how much she makes & it happens to be $2,000 more than me & $3,000 more than Girl #1 & she had been making that since her first day. So, even though she’s in the lower scale position, much, much, more inexperienced, she does absolutely nothing while she’s there, she’s only been with the company 6 months, where I’ve been with them for 2 years; and she still makes $2000 more a year. So, you tell me how that’s fair?

    I know this sort of thing has happened to a couple of others as well, it was just different circumstances. The worst part about the whole situation is that I know & there is not a damn thing I can do about it.

    If a company is fair in the way they compensate their employees then they should have nothing to hide. I don’t see how anyone could be upset by a person making more money if they had more experience & there qualifications were better suited for the job. Now if one person isn’t making that much money, but has the same experience, qualifications, & seniority, then they have a right to argue there case.

    After all, we live in a democracy, not a communism.

  56. I think that the idea of an open salary is a good one if – and only if – the individuals involved are all highly motivated contributors to the growth and development of the company.

    This may work well in a smaller organisation that is growing but will hardly work elsewhere for one important reason – it assumes that individuals are going to be reasonable and accepting of differences in salary.

    I can see this working well in a tech company – especially where there are many developers for the simple reason that developers tend to be of the same type (I know, I’m one myself) – rational, logical and generally accepting and fair people.

    I can’t see it working well though in an environment where there are many different perspectives and personality types – especially when the organisation becomes larger – no one wants to be shown a metric of value that shows them as less valuable – especially when they may not share the same thought process and logic of the person who implemented the compensation system in the first place.

  57. I work for the government. My salary is known to anyone who wants to look up my grade, and factor in:
    1. Seniority / step level
    2. Position code
    3. Locality pay

    Likewise, so are all the salaries of all my coworkers. Guess what? Nobody cares. If someone does a particularly good job, they get an annual bonus. The tension is non-existent over this matter, whereas when I was a contractor, the tension was amazingly high. It was as described in the article – everyone “knew,” no one could talk about it, frustration was high.
    The one good thing about government work – other than the fact that you have a job even if the economy tanks – is that the pay is fair. You accept a position, it has a salary, the tables for advancement are open, the locality pay is open… you don’t have to be a strong negotiator. Some of us prefer to work than negotiate. Some of us prefer to work rather than try and take blackmail photos.

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  59. I work for a company where talking your salary can get you fired , they are paranoiac about UNION , I have yet to see the relation between the two , I really don’t care how much my fellow co worker is making as long as he/she deliver … By the way Our CEO was boosted a few month ago , His severance package was the most outrageous in the History , so bad It went all the way up top congress , sad part about it He delivered nothing for the share Holders nor the Employees .On my part if He had delivered I would not even mind If they had given him twice what he Got ……

  60. Sharing salary information in the office will not resolve the fact that some employees will always be unhappy and feel that they deserve more. Even if they don’t.
    As an employer, there are 2 key factors, what the employee deserves (what you bring in to and for the company), and what the employer can afford. Hopefully you can trust your employer to be as fair as possible.
    There are many other factors and it’s difficult to narrow them down when you are in the design service industry. It’s not a matter of making a sale. Sharing salaries and looking to justify your decisions sets you up to discuss other employees performance, work habits or background. You can’t release confidential information. If they know -they know.

    PS: I don’t think you can really get fired for discussing salaries.

  61. In response to “Rosaan Said’s” comment, I have wondered the same thing regarding whether or not, from a legal standpoint, employees can be fired if they are discussing salaries.

    I can’t find this policy anywhere in our employee handbook, however, everyone, including supervisors say that it’s grounds for termination.

    If they can’t legally fire you, yet they tell you they can in an attempt to encourage you not to say anything, that to me says they know their not compensating everyone fairly. Instead, they try to intimidate you by dangling your job in your face, rather than just implementing a fair compensation program where salaries are known throughout.

    For example, we have two girls, one who literally instant messages all day long & the other is never here, leaves without telling anyone. Both of these girls make 35k/year while two other employees that were promoted to the level just above them are only making 36k/year. & they’ve been with the company 1-2 yrs longer. How messed up is it that you know this & can’t do a damn thing about it!

    If the program is setup right, I truly feel this would cause less conflict, less resentment, less hidden agendas, & less conspiracy thoughts within the workplace. And create a more motivated, focused, & challenged group of people.

  62. Sounds nice but I have one question: how can you ensure in the same time salaries are known inside the company but unknown outside (to the competition)?

  63. The competition will have to keep up and always has , it make no difference what so ever , at the nd the Employee benefit the company does not have closet mentality which is detrimental to production and the share holders . By the way some company do post their salaries.

  64. Hey, how about this…what I earn is none of your damn business.

    I would never work for a company that openly published salaries. What I earn is between me, and the person who signs my check, and that’s it.

  65. I have had interviewers for jobs tell me that they are not going to pay me as much as other employees because I am recieving a retirement from another career. Since I retired I can work for less pay. I told them that they did not earn that money and don’t get to steal from me and walked out. How do I know that my current employer is not doing the same thing but just not telling me if salaries are secret?

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  67. The one biggest reality check is that, YES, NO MATTER WHAT YOU DO SALARIES CAN”T BE KEPT SECRET….and so.. consequences are obvious…guess its about time for companies to stop acting like ostriches …

  68. This is one of those things (the sharing of salary information) that might sound good in theory, but would be a disaster if implemented at many companies.

    As several posters have noted, there are often very legitimate reasons that one employee makes significantly more (or less) than another employee doing substantially the same job. The problem is that, while management might appreciate those reasons, co-workers may not. In a way, its human nature to think that were better than everyone else at what we do; even when it isnt true. (Just think about driving, for example. Everyone thinks that THEY drive well, and that everyone ELSE drives bad.) So, the idea that management can just explain away the pay difference, doesnt strike me as very realistic.

    Aside from this, many factors that go into evaluating an employee and setting his pay are intangible. Because of this, various people in the office may have very legitimate differences of opinion as to the value of specific workers, based upon their own relationship with and knowledge of each worker. In other words, no matter how good a manager is at explaining why a particular employee gets paid a particular salary, you will at least in a big enough company have at least a few people who have a very different opinion about that same employee. This will ultimately breed resentment.

    Oh, and I should mentionIm surprised that so many here claim to know what their co-workers make. It is hush-hush at my company, and somehow manages to stay that way pretty successfully. Maybe people just gossip less where I work?

  69. We have secrete salaries where I work and it drives me nuts! Especially when new hires talk about how much they were hired and they are making more than I am after working there a year and a half. Doesn’t motivate me to work any harder.

  70. hello this is a great page i work at a place where all wages are a secret and when that is the case you know someone is being paid unfairly and another guy worked with me started after me left came back a yr later and has moved past me and im very hard worker and he has nothing on me i wish there was a web site to post names of all unfair employers ty an good day 2 all

  71. “There is nothing more unequal than the equal treatment of unequals.” – Abraham Lincoln

    The above concept is one of the hardest for anyone to understand. Open Salaries are a bad idea for that reason. With open salaries, you end up treating someone better than what is deserved.

  72. Salaries and the amounts paid to people should be made public knowledge, like MPs’ expenses. This should be absolute law throughout the EU.

  73. I really like exploring new ideas about current salary systems in the world.

    I believe open salary is a necessity if you want a company where people can find honesty, objectivity and productivity. If you try to hide salary info, the only thing you’ll get is a dishonest corporate culture where everyone will gossip.

    However, it is really hard to accept some fact that hurts. That is, if you make less than a coworker you’d feel that you’ve been treated unfairly. Even if you’re a super mature and logical person, you’ll not understand the situation in an objective perspective.

    The only thing company executives can do (and should do) is to hire new graduates who does not have experience in traditional work environment. By this way you can impose a culture of openness and fairness from the beginning.

    You cannot explain the 100 $ difference in salary between two co-workers doing exactly same work if they are experienced people. You cannot expect them to understand your explanations of “dan is getting more than you, because he performs better” etc. They’ll simply be heart broken even if you’re telling the truth.

    I believe that’s why old companies continue this “salaries are secret” policy, simply because they don’t have a culture which can accept this kind of honesty. Since its really hard to reshape a well structured culture, its almost impossible to change this policy effectively.

    In summary, you can only try this type of open-salary style if you are a startup (or sth. like that) or you’re hiring fresh graduates.

  74. Imagine a medieval world where you had to bargain for everything, Imagine a world where corporations paid their staff baksheesh.

    Just think if you had to negotiate everytime you went to the petrol station. Just because you drive a Rolls Royce you must pay more for petrol.

    Just think everytime you went tothe supermarket having to negotiate for the contents of the shopping trolley.

    Jobs sold on eBay that’s what’s coming.

    My firm [a large American one] is totally dishonest about salaries and rewards. It’s nothing but corrupt. Someone high up is pocketing your salary, the one you should be earning.

    In the end these firms will collapse under their own weight of crud. Corruption is so Byzantine.

    Pay me the going rate. Advertise the salary up front.

  75. What constitutes a high level of commitment to a company, will this perpetuate gender inequality in the workplace? Is this conducive to a happy employee and workplace? Does it eliminate competition between colleagues? From what I’ve read here thus far, there are some labour friendly suggestions; however, Alex’s suggestions are contextualized in a profit oriented scheme in aim of producing “happy” employees, who are generally more productive and thus, profit yielding and willingly want to work and contribute more to their workplaces. In that case, the choice to work better, more etc is individualized and the element of exploitation is obscured. Thus, happy workers are motivated by a love of their jobs and work, rather than seeing it as the only source of income and sustenance. Understanding the nature of work, attitudes towards employment, changing work contexts, and work ethic can only be understood through a historical understanding of the meaning and social attitudes towards work.

  76. I think my company could greatly benefit from making salaries known. We seriously overpay people who do not contribute to the bottom line, yet underpay the producers to the point where they have to get a second job.

  77. Greed and jealousy are not attractive. When I apply for positions, I agree to a salary and a job description. Claiming unfairness is jealousy over what another has and greed over wanting more than to what I originally agreed. if I thought the position should pay more, why accept it in the first place?

  78. Secret salaries prevent women knowing what is the proper rate for the job. This is contrary to the law of our nation. This is not a question of who is jealous of what but a question of how the employer seeks to exploit staff, especially the more vulnerable. I do not trust employers at all in this respect.

  79. Yes, it seems that salaries are kept secret to decrease the amount of discontent that employees feel after learning about the differences in the salaries. However, I truly believe that if salaries were objectively and fairly determined, then there is no need for this shady secret salary business. The only thing that needs to be set up clearly, as noted above, is to have a strict set of guidelines on what is required to move up to a higher paying level of salary. For example, what degrees does one need to possess? How many years of experiences does he/she need? What subjective recommendations/evaluations can help determine this raise?

    As a former employee, I loved the organization in which I worked, but there was one HUGE problem. Employees, who were less qualified than I, were making more than I was. Why was this the case, when I had the seniority and the higher qualifications, as well as excellent evaluations from my co-workers and supervisors? The answer that I received from the HR department was that I started off from a certain “base” from which I rose, depending on the evaluation of my supervisor during period raise periods. I started working for this organization as a high-school graduate, one of the youngest employees, and for this reason, I started off at a very low base. However, I soon went on to get higher qualification, with bachelors degree in biology and minor in japanese, as well as to get a master’s degree. Currently, I’m working on my MD degree concurrently with my 2nd master’s degree. However, if I was still working at this same organization, my pay would still be lower than someone who did not have all of my qualifications. The reason, stated by my HR manager, that I stared off on a lower base, so if I wanted to, I would have to “resign” first, and then “reapply” to start off on a higher base. However, that would mean I would have to give up my seniority and start fresh, meaning that I would have the worst choice in scheduling.

    Does this make any sense at all? I did not understand why “new updated qualifications” could not be taken into consideration in increasing my salary to a more suitable level.

    Now, going back to the original forum topic, I really feel that “opening” up everyone’s salary would help in this regard. If one individual has much higher qualification and is making much lower, would that be considered fair? No! Thus, adjustments would be make to make it fair. Of course, others cannot complain because if they wanted to, they could increase their qualifications as well. For this “open salary” policy to work, the factors involved in each level of salary must be clearly and objectively stated.

  80. One thing I strongly believe is that most of us think we are better than we are. It may or may not be a fact but on the job, we are only as good as our employer sees us. It’s the value we provide to the business. If one has the same qualifications and seniority of another but the employer sees one as a more valuable employee that person should be entitled to make more. Maybe that employee produces more or the clients like him/her better or maybe arrives 5 minutes earlier and calmer than the other or just has a better attitude. Who is entitled to more is subjective and difficult to set in formal salary standards. I would trust that your employer will be fair but in your case, it sounds like your organization has very old fashion and rigid salary guidelines. These guidelines should be evaluated and updated with fair and humane results. I worked for a huge corporation years ago that would only adjust us according to formal promotions and yearly evaluations and even with the highest rating using their archaic “formula” would take years to catch up. All it takes is a strong and reasonable decision maker to correct salary procedures but if there is a long chain of command than that may be difficult. I don’t blame you for not wanting to loose seniority, that seems to be priceless nowadays. I still believe that it’s OK to keep salaries secret but I think that HR should do away with those obsolete salary guidelines. Actually they were intended as guidelines for and not to be used as codes set in stone. Good luck.

  81. I do not know if I completely agree with the notion of eliminating secret salaries. While it may make the organization more transparent, it could also bring up a whole mess of HR issues. In m opinion, workers that perform the same tasks but receive different compensation has different skill sets. Managers see this and often pay some in different proportion to others.

  82. An organisation which hides its salary and rewards system from scrutiny, shows to me what kind of organisation it is. It is essentially a dishonest organisation, one which lies and prevaricates. It demonstrates to me that the management of that organisation are incompetent because they have failed to work out a fair, open and honest remuneration system. Perhaps they simply want to hide their own salaries behind this smoke screen because we all know they really don’t deserve one penny of they get themselves.

    Most managers nowadays are grossly overpaid for the little value they add to the firms they work for.

  83. I never make a gripe about salary why? because when I accepted the job I accepted it for a certain pay. If for any reason I find out what my colleague is making and I know that person may have more skills or credentials than I, then I shut my mouth. However if our credentials and the skills are the same but the pay is significantly higher then I need to make sure that I am first on top of my job so that during evaluation these points will be mentioned and I will expect an equal or greater variable or a satisfactory explanation. If either does not occur that’s more than enough reason to call for unfairness. Thank your for your time.

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  85. Some people know everybodys salary. People in HR and Payroll along with many people in Finance do know. Why is it that we think these people can share the “secret” and be ok with that – even knowing that someone else in a similar position is being paid more than themselves? Why is it that the HR director can know all salaries and not be put off by that?

    Certainly I think that everyone can handle the knowledge – and I think that having an open policy on pay will force executives to be more modest and fair in setting salaries – for themselves and for everyone else.

    I think the greatest resistance against open salaries is that it takes away power – power of knowledge!

    Finn Gjerse

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  88. The money you earned is What makes you happy you should always be proud of what makes you happy by all means show me the money!I am now with AMBIT ENERGY! And it is posted what you get paid based on what level you are at.Money makes the world go round so let’s keep showing the money around. Thank you so much Alexande

  89. I would like to know if it was legal for me to post how much my boss’s make. I’m an accounting clerk in a company owned by Japanese investors who seem only to promote japanese to management positions. Most ppl at work know that they will never have an opportunity to advance let alone have a decent raise. I personally am making less than market rate for my position and would love to do something about it. Recently, I came across a document which specificly states how much top level management makes and would like to share this with my fellow co-workers in hopes we could make a change in the pay structure. I’m just worried that revealing this information could lead to legal problems down the line. Also not afraid of losing my job if it means changing the payscale for my co-workers. Any suggestions ppl?

  90. I am a payroll administrator, and see all the salaries in my Company – a private retail company – where pay rises are not yearly, only sick pay only SSP, and outlook for rises are quite poor. Some colleagues appear to do quite well and I feel are very well paid, while others only so, so, and many are on minimum wage.

    At the end of the day if I don’t like my pot, I have 2 choices –
    grin and bear it or
    ‘try’ in this economic climate get another job elsewhere!.

    The job market currently is very poor –
    should we have let in 1,000,000+ people from the Eastern European Countries?

  91. Companies should have a rules about salaries to make it more fair to all the employees. It should also have a clear policy on promotions and salary increases to encourage employees to work even harder.

    Making salary a secret creates negative issues inside the organization and oftentimes lead to demotivated employees.

  92. Keeping it a secret is fine for those coworkers that get less.. otherwise it may make them sleep bad =)

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