Secret salaries revisited

Secret salaries

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.

Now Elana Centor revisits the issue in a post called The Last Frontier: Sharing Your Salary With Co-workers. She also finds that the idea of sharing salary information is not widely accepted.

Talk to most employee consultants and they say talking about salaries with co-workers is a bad idea.

My online search found just one consultant who agrees with me – Alexander Kjerulf who consults on how to be happy at work.

She cites some interesting articles. One horrible, horrible article on USAToday keeps telling us to never discuss our salaries – without ever once mentioning why. Except of course that it’s more convenient for the boss if you don’t.

It also blithely tells the story of an employee who was nearly fired for talking salary – even though US law explicitly says that “employers cannot interfere with, restrain or coerce employees in exercising their rights to discuss their wages, hours, and other terms and conditions of employment for their mutual aid or protection.”

More relevant is a CNN article that tells us to proceed with caution, but at least acknowledges that sharing salary information can be useful.

More tellingly, one commenter tells the story of finding a fax with all her co-workers salaries in it. The result: She is frustrated because she feels she is paid too little relative to her co-workers – but she can’t complain because she can’t admit to knowing their salaries.

I’m still convinced that keeping salaries secret is bad for both employees and businesses. It may seem easier and more convenient here and now, but the net result is an increased focus on compensation.

The question is of course how we break the taboo – it seems that in some workplaces talking about how much money you make is akin to discussing your sexual preferences. Any ideas?

8 thoughts on “Secret salaries revisited”

  1. This is protective for the company. As a mock example: a position opens up in the company. The starting salary is 42,000. A person brought in from the outside could get anywhere from 42,000 to 46,000 based on experience. A person inside the company with time and experience both in the company and relative to the opened position is currently making 36,000. Because the salary increase exceeds company standards, this person will not be able to make 42,000, instead making 39,000. Now the company has hired internally which is good, but is paying someone below the minimum salary. Since they don’t publish salaries, nobody is informed on it. The numbers are different, but this is something that happened at a company I’ve worked for. The company I’m with now doesn’t publish salaries, but DOES publish salary ranges, such as the minimum and maximum a particular position is paid. This helps people gauge their compensation to both other employees and industry compensation, without someone having to explain why a specific person makes more than another employee.

  2. This is a tough issue to tackle. Money is a very touchy subject for many people. I don’t even tell my best friends how much I make. Why? Money is too often used as a measure of class, status, intelligence, etc. Silly but true. Inside the workplace, it’s even worse. I’ve had the misfortune of finding out what some of my co-workers make, and it’s caused nothing but jealousy, ill feelings, feelings of inadequacy, feelings of being cheated, feelings of being undervalued by your bosses, increased competition and a focus on money above the joy of my job. It’s really terrible to know what your co-workers make.

    A better solution would be to make a way for people to know exactly how much they are worth in the workplace. Sites like Salary.com try to do this, but their “pay for information” model is a barrier to essential information. If everyone knows what the fair price for their skills is, it’s easier to measure where you are salary-wise.

    I think every business tells its employees that talking about salary is grounds for termination, but that’s just to supress all of the negativity that can come from exposing everyone’s salary. I think it’s not so much because employers are evil, secretive and manipulative as it is that as human beings we are generally greedy, focused too much on money, and unable to properly deal with perceived inequality.

  3. Secrecy about salaries is great for companies. The Supreme Court has just ruled a woman/minority/whatever has only 180 days (I think that’s the number) to sue for discrimination about salaries. It doesn’t matter that it takes a lot longer than that to know there’s a bias.

  4. It’s interesting. When I got paid a salary, I didn’t want anyone to know what I was paid. Now that I’m a consultant, I’d love for everyone to know how much I make. I think the difference is that as a consultant, if I’m paid too much, people would pick and choose what work they really want me to do, in order to get the best value for their money. So as a highly paid consultant, I only get hired to do what I’m really good at and enjoy (which I love, because it makes me happy).

    But as a salaried employee, in most companies, instead of picking and choosing which work I should do, they’d just pile on more and more work. This of course is an issue of corporate culture. But if I were a highly paid salaried employee, I’d be afraid that if everyone knew how much I made, they’d want me to put in more and more hours, in order to “earn my salary.” If I chose to accept these demands, they’d make me unhappy. Alternatively, if I chose to set limits on how much work I do, I’d be afraid of being fired or otherwise punished.

    -TimK

  5. There’s a fallacy that somehow salaries stay secret if you don’t bring up the issue or if the status quo demands not to say anything. The reality is that people talk and everyone will find out if compensation seems out of balance relative to the work…

    I think this is such a controversial issue because it is only a symptom of a poor work environment.

    If you’re in a good work environment, people are focused on the work that makes them happy. Happy people know how much money they need in order to live the way they want and will not likely accept a job that provides otherwise. If you love your work, why would you be worried about what the person next to you is making?

    If salaries are public, it encourages open dialog as to justification and/or correction of pay. Otherwise, who is benefiting from secret wages?
    Only those exploiting others.

  6. I have to agree with Jared below. I employ 700 people company wide. Salaries and wages are the things I hate dealing with most because of the emotions. Mike Hoffman commented, “If salaries are public, it encourages open dialog as to justification and/or correction of pay.”, and I would love a work environment like that! What I have found over the years, however, is that people are very emotional about salaries and wages which gets in the way of logic and talking about why they get paid what they do. They get to the point where it does not matter what you say, they have already determined that they should earn more than the person next to them for whatever reason.

    Now, you may say I am hiring the wrong person then, and you might be correct. However, I am dealing with unemployment rates of 4% in my area, which means I do not have a lot of “Happy, emotionally stable” people applying, so you have to work with what you get and try to help them be better.

    I do agree with Mike Hoffman when he talks about if someone is happy at work then they don’t care what the person next to them is making. So my question and reason for not revealing it is, “If I have a bunch of unhappy people who want to know everyone’s salary, how does revealing that information make them happier?” I feel that it wouldn’t and would just create those jealous feelings that would make the workplace more miserable for the unhappy and happy workers. Really, I think you need to solve the happiness problem first, and then people won’t care what their coworkers make.

    PS – Last week I attended an employment law conference conducted by Lane Powell PC. Here in my state, if I disclose personal information (including salary information) to people in the organization who are not on a need-to-know basis, I am open to a discrimination suit (even though I have told them the facts why they make less than the person next to them, they still belive it is due to their sex, race or religion) and it enters the realm of me being sued privately due to the information violating privacy statutes. Perhaps there are ways around this through better polcies and signed disclosure agreements, but all I want to do is pay you to do a job. Can’t this be simple?

  7. I’ve just started a small business and I’m considering having an open salary policy. However I can tell you that the number one issue I have with it is the lack of feedback from companies who have tried it and either failed or succeeded. If I knew what to watch out for, how to impliment it, and suggestions from the trenches then it would make that choise a lot easier.

    With that said, could somebody compile some info on that? Alexander claims to have known plenty of companies that do it, so how is it working for them and what stumbling blocks have they encountered?

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.