- Report this article
Supriya Thankappan (Agarwala)
Supriya Thankappan (Agarwala)
Head HR / CHRO/ HR Business Partner / HR Advisor
Published Jan 15, 2015
+ Follow
Somewhere along the growing up years, we all learnt to equate success with how much we earn. Media played it up by discussing salaries of C-Level executives, fresh hires who landed a whopping first salary. HR professionals made it further difficult by treating salaries like trade secrets and warning you to keep the magic figure confidential. Payscale made a business out of this by creating an online Compensation & Benefits information portal. Water cooler conversations after annual increments are around the rumours of “who got what”. Your salary can either be a source of joy or sorrow till you know someone else’s. Sometimes in a weak moment, you share that number with your best friend or colleague. You get the drift - this is serious stuff with so many emotions running high. Why then is salary a closely guarded secret? Can we do otherwise?
To answer the first question, it is necessary to understand the process of salary fitments for a job. This process is not an exact science and it is based on the process of evaluating jobs. Job evaluations aim to make a systematic comparison between jobs and assess their relative worth. Job evaluations set a basis for deciding the monetary value that is accorded to the job. The prices of similar jobs in the market are then compared and a decision to price a job is made. This is where it begins to get fuzzy. For one, organizations decide where it wishes to price jobs with respect to the market. Further, the salary for a job is not a single number but a range of salaries from minimum to maximum. This helps take care of subsequent salary increases made to the job holder. It also means starting salaries can be fitted at any point in the range. So employees joining a particular job can have different starting salaries based on what they earned in the previous job and how they negotiated when they joined the company.
The biggest reason for maintaining salaries confidential is to mask the pay differences between those performing the same job. Answering queries and grievances on pay disparity is an HR Manager’s nightmare. While relative value of differing jobs can be explained, pay differences in the same job cannot be explained rationally. Further, for differing jobs too, market price for niche skilled jobs or emerging jobs (where no historical salary data is available) is based on perceived value or business need for the skill. Here jobs are priced as per buying capacity of the organization, demand / supply of skill set. Explaining the salaries of such jobs to other job holders can also be tricky and here again keeping it confidential helps. Pay increases in most organizations are based on performance and though there are rules followed to accord increases, it may far from being objective in the eyes of the employee. Firstly, the issue of correctly determining performance levels has to be addressed. Then the decision to provide increases to ensure that pay differences for the same job are ironed out are to be made. Pay differences also arise between employees who are hired from the market compared to those who have grown to a position from within the organization. Unfortunately, it is costlier to buy than to build or it is perceived that those who grow within don’t mind lower salaries in exchange of developmental opportunities. Explaining all this to an employee can become very tough and the easier route seems to be keeping the information confidential. Radical transparency may just open a can of worms!!
That however, may be far from being true. The Great Places to Work Institute has through its research and data from millions of employees ascertained that trust is the foundation of a great place to work. Transparency is one of the key drivers of trust. It kills the rumour mill, and thus removes the distractions, fears, and negativity that saps concentration. Trust brings with it more agility, helps bring forth feedback; it makes talking about difficult things and challenges easier. It opens the doors to better functioning, improved productivity. The biggest case for being transparent in employee salaries is that it opens the doors for a higher level of trust in the organization. It also brings in more accountability in those who administer salaries right from the business leader who approves the salary to the recruiter who makes the offer. It calls for a systematic process to make salary decisions and an ability to explain differences.
Among companies who have adopted this policy to their benefit, is Buffer, a social media management company. Buffer is the creator of an application (by the same name) that is designed to schedule posts to Twitter, LinkedIn and Facebook. One of the core values at Buffer is “Default to transparency” and in line with this value, salary information at Buffer is open to all. You can read more about Buffer’s salary formula here.
In today’s world, we have become more open to sharing more of ourselves through social media. We live in an unprecedented age when we consume more information than our ancestors. Our children, born into such a culture and who will be the employees of tomorrow wish to be more informed about matters affecting them . Organizations of tomorrow have the choice of being early adopters of new and disruptive policies to make the workplace more relevant for the new workforce.
#Compensation # Human Resources # Payscale
Help improve contributions
Mark contributions as unhelpful if you find them irrelevant or not valuable to the article. This feedback is private to you and won’t be shared publicly.
Contribution hidden for you
This feedback is never shared publicly, we’ll use it to show better contributions to everyone.
Like
Celebrate
Support
Love
Insightful
Funny
47
7 Comments
Shailey Tripp, PhD
Looking to create Cylons - Robotic Engineer Designer and Software Developer specializing in AI training and the ServiceNow platform
1y
- Report this comment
Equality Act in 2010,you have the right as an employee to discuss salary. This means that your employer has no legal standing to stop you talking about what you earn, with anyone you work with. Pretty sure this makes it illegal for your wages and salary to be hidden. I don't think an employer can legally ask you to keep it private nor can they ask you not to discuss it with anyone.
1Reaction 2Reactions
Nagendra Prasad D
HR Professional with 25+ years of work experience in diverse organizations and sectors.
9y
- Report this comment
Excellent and well written Supriya ! At the end of the day compensation is the reward for perceived value by the management and it is their prerogative and risk. Fine balance is range should be visible for a level but not specific individual's remuneration.
1Reaction 2Reactions
Bhumika Trivedi
Director - Country HR (R&D) Teva India | Pharma | Biotech | EPC | BFSI
9y
- Report this comment
True..... Willingness to be transparent is important....
1Reaction
Bhumika Trivedi
Director - Country HR (R&D) Teva India | Pharma | Biotech | EPC | BFSI
9y
- Report this comment
A scientific process of Skill and Competency Mapping may help here. As an HR Manager, we can give employees data as why there is a difference in the salaries.
1Reaction
Shriman Mishra
Seasoned Operations and L&D Professional
9y
- Report this comment
very true
1Reaction
See more comments
To view or add a comment, sign in
More articles by this author
No more previous content
- Customers First or Employees First ? May 21, 2015
- Eleven Commandments for effective feedback May 5, 2015
- Workforce clairvoyance through Talent Analytics! Jan 9, 2015
- A list to ponder over Dec 19, 2014
- So, what story do you want metrics to tell? Nov 20, 2014
- How crisis transformed me. Nov 13, 2014
- What is the business value of your HR Program? Nov 5, 2014
No more next content
Insights from the community
- Human Resources How can HR professionals use benchmarking to determine salaries?
- Career Development You're a government agency employee. How can you negotiate your salary?
- Compensation Structures What are some common challenges or pitfalls of using salary range and midpoint formula?
- Compensation Structures How do you handle salary band compression or overlap issues?
- Global Talent Acquisition How can you use salary transparency to attract and retain top talent?
- Compensation Structures What are some best practices for updating salary ranges and midpoints over time?
- Global Talent Acquisition How can you design a compensation package that attracts global candidates?
Others also viewed
- Why you shouldn't disclose your current salary when looking for a new job. Jonathan Barker 4y
- How to give positive feedback to your clients? A Guide to Positive and Collaborative Experiences. Mangobyte Digital 9mo
- When Are You Not Allowed to Share Confidential Information? ACHKAR LAW 1y
- Why should salaries be confidential? Payroll Outsourcing with CloudForce HR Thailand. CloudForce HR Co.,LTD 8y
- When Job Hunting, You Must Practice Three "P's": Patience, Persistence, and Never, Ever, Ever PANIC! Kitty Boitnott 8y
- Is Asking Job Applicants About Their Salary History Okay in Your State? W. Barry Nixon 8mo
- Should we stop asking about salary history? Nicky Acuna Ocana 10mo
- Breaking the silence: Why ending pay secrecy is essential to equality and accessibility in the workplace Paul Hawkins 1y
- Current Professions in demand for anyone to get a job in Netherlands With a Work Visa Immigration Ultimate 3mo
- Demystifying the Compensation Black Box Clara C. 6mo
Explore topics
- Sales
- Marketing
- Business Administration
- HR Management
- Content Management
- Engineering
- Soft Skills
- See All