What would happen if you walked into the hallway today and posted a listing of every employee's salary, from highest to lowest?
Mayhem? Fistfights? Certainly a lot of questions.
While secrecy shrouds pay levels in most businesses, Alexander Kjerulf says it’s time to bring salaries out into the sunlight. In a recent guest column in The HR Specialist newsletter, the consultant and author of Happy Hour is 9 to 5 says open pay can benefit organizations and their people.
Kjerulf argues that the main reason salaries are under lock and key is precisely because they’re not currently fair in many organizations. Going public (inside the company, of course) has three major advantages, he says:
1. Salaries will become fairer. The system gets a chance to adjust itself.
2. It will be easier to retain the best employees because they’re more likely to feel they’re receiving fair pay.
3. The pressure is on the people with the highest salaries to earn their keep. Everybody has to pull his or her weight.
Open salaries would work, he says, only if employees know which factors influence salaries. Are they based on customer satisfaction, hours worked, quality, sales figures, seniority, skills or education? If the company has not clearly stated the criteria, comparisons are meaningless.
Kjerulf said that, in his company, they agreed that customer service and commitment to the company were the most important factors. “We put this on our intranet. It almost made salary a nonissue,” he said.
COUNTERPOINT: On the opposing side, public pay scales make it a whole lot easier for employees to spot wage differences that could trigger discrimination lawsuits based on age, sex and race.
Plus, what about morale and productivity? A 2010 study by professors at the University of California at Berkeley said that when wages are made public, employees with the lowest paychecks report lower job satisfaction and greater desire to jump ship.
So what do you think? How would public pay work in your organization? Could you ever see your organization moving in that direction? (Leave comments below)