Talking salary has generally been considered taboo and a sign of bad manners for decades. Salary figures have long been under lock and key, exact amounts shared only between employer and employee. However, a few progressive companies are putting this long-time philosophy of keeping salaries secret to the test.
Companies like Whole Foods and Buffer have begun practicing wage transparency. In other words, a practice that allows the salary information for every employee to be transparent and accessible to everyone else. Some companies keep the information internal, while others put the numbers on the web for the entire world to see – and learn from.
While this is no doubt a controversial workplace policy, there are pros, cons and potentials to be considered. Is this openness a benefit for workers? A hindrance? Most importantly: could wage transparency be a sign that the gender wage gap is about to close?
A Loaded Development
Many view the availability of salary information as a positive improvement to workplace culture. Companies with salary transparency in place state the openness creates a more trusting work environment. And why wouldn’t it? When individuals know where they stand in comparison to others, when they understand the value of each co-worker’s time, and when they can apply job skills to a dollar amount, it can create an environment that values hard work and continued learning.
The caveat to all the potential benefits of the progressive program is potentially discouraging the employees that earn salaries on the lower end of the spectrum. Feedback suggests that higher earners in the company have no reservations about their salaries being posted while some of the lower earners feel demoralized when their peers learned of their salary.
The drawback of this sentiment is obvious. If workers are feeling discouraged about the amount of money they make, they may look elsewhere for gainful employment.
A Case for the Cultural Fit
While losing valuable employees is something every business hopes to avoid, the public salary practice may help to create a more cohesive company culture.
This type of phasing out may be exactly what companies practicing transparency are hoping for. By weeding out employees who are strictly focused on leveling the money playing field, the company is ridding itself of employees that probably don’t fall in line with the workplace ethos. Wage transparency allows companies to craft a certain culture – a culture free of secrets — where individuals in favor of wage transparency apply, and only individuals in favor of wage transparency are hired.
This type of extreme transparency fosters trust at all levels of the company. Essentially, if you don’t trust the ethos and fit the culture, you aren’t the right person for the job.
A Way to Close the Gap?
What does this practice in transparency mean for the gender pay gap?
As we are well aware, women with the same education and experience as their male counterparts are being compensated less, earning only 78 cents for every dollar, compared to their male peers. So for companies that showcase pay information, they are decreasing their opportunities to discriminate against women and minorities
If organizations showcased salaries, and also paid females less, they would be risking a lot. They’d effectively turn away female talent — and females in general. One has to assume that companies couldn’t continue to successfully discriminate against minorities and women if proof of that discrimination is open and available for everyone to see.
One thing is sure: if companies practicing transparency didn’t alter salaries and decided to make them all public today, we’d see the unequal pay scale is irrefutable. The existence of the gender pay gap couldn’t be denied.
What do you think? Would you work for a company that practiced wage transparency? Share your thoughts in the comments below!