What if you go to work tomorrow and everyone’s salary is announced via an email sent by your CEO?
Now you know how much more your colleague next door is making… regardless of his tardiness everyday, he is earning almost $1,000 more a month!
As a female manager, you always assumed you were making less than your male counterpart but getting paid half was beyond your imagination! Seniority, hard work, late hours, stellar performance reviews… you really don’t know what counts anymore!
And your Director… his salary does not compare to the other department heads. Your department is altogether neglected. Why?
What determines salaries? What are the criteria – seniority, performance, position?
Nothing seems fair.
As an employee, would you prefer pay transparency? Or would you rather prefer that your firm keep them as top secret?
What about the Senior Management Team? What is best for your company’s interests?
For both the employer and employees, the key issue with transparency is fairness and trust.
Agreeing to be transparent, a workplace opens up its traditionally confidential information to its employees. This is a big step. It means two things: (1.) The employer completely trusts its HR practices regarding pay and (2.) correctly anticipates its employees’ reactions.
Let’s take a look at a real world example of a successful pay transparency case: According to a Forbes article, last year, Verve, a UK based tech firm took this big step towards pay transparency, allowing all its employees access to everyone’s pay data, from entry level positions to all the way to their CEO.
Verve was well prepared before taking this big step. First, Verve set clear HR guidelines regarding pay: pay is determined based on job scope and market value. There is no room for biases as objective criteria were set to justify pay in all levels. Second, the company made sure via surveys that the majority of employees were in favor of pay transparency before taking an action. Although the Management had concerns on getting complaints from unhappy employees, they decided to implement pay transparency policy as a means to reduce bias and increase diversity (no gender gap in pay, a more welcoming work environment for all genders, different generations, ethnic backgrounds) through fair pay. And it was a well calculated risk that turned out to be an HR success.
Fair pay permeates fair practices in all functions of the firm. If a firm is fair to its staff, it is highly likely that it’ll be fair to its customers, stakeholders and potential employees. Being fair becomes synonymous with the firm and its brands, and instills trust in the workplace.
What if you go to work tomorrow and everyone’s salary is announced via an email sent by your CEO?
Maybe it won’t be as bad as it sounds…
Ela EROZAN GÜRSEL
