Thursday 19 February 2015

Pay Transparency - on Glassdoor and in your Organisation too

Glassdoor have published findings from recent research into salary transparency.  Headline conclusions are that transparency is already increasing with a healthy minority of staff already knowing their colleagues salaries and also that there is a significant appetite for more salary information.

There's no real surprise here for me - salaries are already largely transparent - people talk about them, the government publishes them (over £150k in the UK), some countries are completely transparent about them (e.g. Norway's Skattelister), pay secrecy clauses are increasingly been seen as illegal etc.  And the Glassdoor survey suggests HR are sometimes indiscreet with them (4% of survey respondents have found out about salaries from someone in HR.)

Actually the fact that HR can have its hands in the honey jar without any obvious dysfunctionality on our part is another great reason for not being so scared of transparency as we often seem to.

But the biggest it's-already-happening reason for not just opening but dropping the kimono is that increasingly all of our salaries are on Glassdoor anyway.  In fact the site alters its usual signature with this survey to suggest that 'Glassdoor helps job seekers circumvent salary secrecy' which of course it does, though it's not  usually how it describes itself.

So if you were designing a new pay system in today's world you just wouldn't even think about trying to make salaries secret, would you?  (I know many start-ups do, but some of the most enlightened don't - e.g. Buffer.)

However the even more important reason for making salaries transparent isn't anything about catching up with what's already happening but is simply that it makes good business sense.

Managing pay transparency may be difficult to manage.  People do tend to find it difficult to understand why some people get paid more than them which can lead to jealousy and dysfunctionality.  But that puts more positive pressure on organisations to re-examine their pay levels and differentials (more on these tomorrow.)  We should be able to justify our differentials and if we can't it probably means they are not justifiable.  It's that sunlight is the best disinfectant point again.

And actually it's not just how we feel about our differentials and need for transparency, it's how our employees feel about them.  In an environment of reduced trust, employees are unlikely to believe we have fair differentials, particularly when equal pay audits have often suggested we don't.

You can see that in the higher proportion of women who want salaries to be revealed (see this Telegraph article).  Now the gender pay gap is a complex issue based upon a large number of factors, not just transparency, e.g. time off for maternity leave (though Shared Parental Leave should reduce the impact of this here); women often being more considered about their careers; men more often being excessively confident about their expectations; and the impact of a huge dollop of bias, etc - but lack of transparency certainly doesn't help.

As I note in Glassdoor's press release (in my role of 'Glassdoor career and workplace expert'):

“People don’t generally like talking about how much they earn directly with friends, colleagues or even partners, but there is a growing appetite for more salary transparency in the workplace. As well as forcing employers to create a more level playing field, it could help break down the gender pay divide. This cloak and dagger approach to salaries must come to an end.”

Bt the way, if you think you might want to implement a more transparent approach within your own organisation give me a call.  And a clue - you don't do it like this!

Picture credit: The Telegraph

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