Thursday 17 December 2015

Pay Transparency in Talent Management

I posted towards the end of last month about my issues with today's pay differentials, included in the ATD's new Talent Management Handbook (in which I wrote the chapter about Reward).

However changing differentials isn't the only action that's needed, we also need to be more transparent about the differentials we have.

This is particularly relevant in the UK given recent reporting that the gender pay gap for women in full-time senior employment is now higher now than it was in 2005.

It'll be interesting to see whether the introduction of mandatory gender pay gap reporting in the UK next year will tackle this and even more importantly whether it will start to increase broader transparency at all.

Here is this section from the Handbook...

Increased Pay Transparency

Most organizations encourage people to keep their reward secret as people tend to judge the worth of other people by focusing on what they can see people doing rather than the real challenges in a job which tend to be more intangible, meaning that pay levels can be hard to justify.  However we are living and working in an world where people are easily able to share information with each other and more importantly, there is a greater expectation that things will be shared.  Given this increasing level of transparency, trying to maintain secrecy around reward or anything else is increasingly unsustainable.

Transparency is also increasing externally as well as internally, particularly with the growing popularity of sites like Glassdoor and increasing amounts of legislation  around external pay reporting.

However the main reason that pay transparency may be needed is that it is difficult to ask people to trust pay systems when they are opaque, particularly when trust is already low, and also when pay is going to be increasingly person rather than job based in future.

In any case, pay transparency tends not to be a major issue in countries where all or some of the salaries are made public.  Also we in the HR / Talent Management function already know and accept peoples salaries and there is no good reason to think we can handle this information but that other people cannot.

One of the businesses promoting pay transparency is Buffer which emphasizes how transparency breeds trust and leads to better teamwork.  Supporting its open salaries approach the company has published how it calculates salaries, bonuses and equity payments and also provides the amounts all its staff receive.

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