I posted yesterday on the arguments for introducing pay transparency, based upon a new survey from Glassdoor which I had commented on as their HR expert.
I argued for transparency largely on the basis that if differentials are justifiable we should be able to justify them.
However, one of the key reasons I think transparency would be useful is that I don’t think very high differentials are useful or appropriate, and think transparency would help to keep them in check.
So the two main additional reasons for suggesting that we need to reduce differentiations are:
- Trust. We know that trust has been decimated all around the world. The best global survey on trust, which you probably know about and hopefully look out for each year as I do, the Edelman Trust barometer shows trust falling this last year once again. In this environment it doesn't matter what the real reasons for high differentials are, they simply don't work. People will read arrogance, greed and self serving into the high pay, and disrespect and contempt into the low pay, even if these intents aren't there.
- Collaboration. The one type of relationship which has seen an upswing in trust during the 13 years or so which Edelman has been producing the barometer is the PLY - People Like Yourself - someone you have a personal connection too. This is hugely important because it provides the basis for trust, learning and collaboration. If you don't see someone as a PLY you're going to be much less likely to work with them, support them or learn from them. And what's the chance of seeing your CEO as a PLY is they're earning 130 times as much as you?
I’ve also written more about these issues in an article published by HR Magazine which you may want to take a look at.
This article also pulls in my other recent blog post on HR professionalism. From a professionalism perspective, the fourth main reason we should be wanting to reduce differentials is because we care about people and society, not just the businesses we work within.
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