Over the past few years, the discussion of salaries and salary gaps has taken the business world by storm. From issues regarding pay disparities between men and women and problems with the hefty salaries of CEOs has stemmed an obsession with knowing the sum of everyone’s direct deposit. However, the questions many executives and HR professionals are asking is “Is sharing everyone’s salaries what’s best for our company?” Also, “Is sharing everyone’s salaries what’s best for our employees?”
Across the board, the answers to those two questions vary greatly. Some research shows that sharing executives salaries with employees who receive much less compensation is a decision that produces painful consequences. Employees who find the ratio of their pay to an executive’s pay has a more significant gap than they once thought, tend to become frustrated or disgruntled in their work quickly. If an employee becomes disgruntled, their first course of action might be to seek employment elsewhere. Therefore, the ultimate consequence of sharing employee salaries for some companies may be the loss of their most talented employees.
Other professionals, however, share the argument that when companies share employee salaries, they eliminate a source of workplace distraction. Furthermore, they believe that when employee salaries are public, companies are better able to see where they hold bias and eliminate causes of unfair disparity within their business.
Both situations (sharing and not sharing employee salaries) involve risks. If a company chooses not to share salaries, employees might view the leadership as untrustworthy or question what they have to hide. If a company decides to share salaries, however, employees may only consider each other based on their pay grade and not the talents and skills they bring to the table.
Although both arguments share fair points, ultimately the decision to share or not to share employee salaries is up to the company in question. Moreover, those who are making the decision should also consider the feelings and privacy of their employees. Many employees, such as the ones noted in this article on Forbes, are not comfortable with the idea that a company would share their salaries for many different reasons. Some of those reasons being pride, workplace relationships, and job security.
In the end, there is a difference between transparency within a company and putting private information on display for all to see. The line between the two, however, is very fine and should be walked with care. Finally, if a company intends to share the salaries of their employees or make them public, they should prepare an explanation for any disparities that exist.