Salary Transparency in the Job Hunt and On the Job

Have you heard the new tread in career-ology? Lisa Belkin of the New York Times recently wrote about it. It’s called “salary transparency,” and the point is that everyone in an organization will know what everyone else in the organization earns. The thought is, if everyone is paid what he or she is worth, there is no need for workers to be secretive about salaries. A key point for job seekers, true transparency will offer more than one leg up when it comes to negotiating compensation.

Some workers have always had salary transparency. Government workers’ salaries are public, as are many non-profit employee salaries.

The JobBoard reminds us that there are a variety of tools to help workers learn what their jobs are “worth,” such as and “next-generation competitors like PayScale, GlassDoor and SalaryScout, [who] are taking things even further.” notes that actual salary transparency raises “prickly privacy issues and lets rivals poach more easily (they know what to offer to snag desirable employees).”

However, the site also notes benefits of salary transparency:

  • A fair compensation system based on actual performance.
  • Employee understanding of the business (e.g., why payroll is usually the largest cost; why certain employees earn more).
  • A culture of trust, as employees and senior managers share more information.
  • Pay would not be a primary weapon in the fight for talent.
  • Organizations could create a more collegial, open system with some salary transparency.
  • Companies would be able to create a rigorous performance-based pay system.

So, what do you think? Is it a good idea for everyone to know what everyone else earns? Would it encourage fairness in compensation? Or is it a train wreck?

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photo by Tony Ciranjiiva


2 Responses to “Salary Transparency in the Job Hunt and On the Job”

  1. 1 Anita Bruzzese August 27, 2008 at 4:47 pm

    I think this is probably one of those cases where we’d like to know what our friends and colleagues are making, but when it comes time for us to show our hand — maybe not.
    I think it can lead to a lot of dissent in the office, but at the same time, it can lead to great equality. So, it’s a mixed bag. I think the only way it will work is if the business culture is one of trust. Without it, it’s just going to be another problem.

  2. 2 Miriam Salpeter August 27, 2008 at 5:20 pm

    Anita – I agree! It seems like it might be nice to know, but there are reasons why salaries aren’t typically discussed! Your point about a culture of trust is crucial. Maybe companies should focus on building a culture of trust before they talk about building a culture of transparency. Thanks for your comment!

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