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Open Salaries

The other day, I heard a radio jockey talk of a company planning to be transparent on salaries of employees. She called up a HR professional who was not only dismissive of the idea but also of the people.
To me his attitude was surprising. Srijan had been practicing it much before I had started engaging with it. Our assumption was simple. However much an organisation may want to keep it confidential, people do get to know each other’s salaries. This breeds lot of discontentment and frustration. For example, I have this friend who moved from academics to industry. She was content and happy till the time, she realized that salary of her sub-ordinate was higher than her salary. The more worrisome part for her was that her peer would be at even higher salary. Coming from academics, she could not factor the exact multiplier between academics and industry. This led to dip in her performance. And it started affecting her performance. Within a year, she moved to another company at a higher salary. The company by keeping salaries confidential gives a message that it would not engage in a discussion on it. Most people are able to vent out this frustration to their immediate or close friends but that does not help as continuous interaction with your colleagues keep reminding the person of the gap.
People associate salaries not only as a means to acquire assets and improve their quality of life but also with esteem. With the concept, market pays you what you are worth, the companies inadvertently also send a message that people in same roles are valued differently. This can be a big blow for a person’s self esteem.
The salary process that we employed at Srijan was open. Everyone’s salary was listed in a google spreadsheet. So people could compare and decide on their own salaries. This helped us in two ways. People could not only question their own salaries but also salaries of others who they did not feel deserve it. By bringing out these conversations in open, we could avoid inter-personal issues and also any discontentment due to salary. This was very different from companies where the salaries are kept confidential. The companies give out a message that they do not want to discuss this issue. Any discussion on salaries is countered with the question, “how did you get the information” and thereby pushing the person on defensive and derailing the whole discussion,thereby letting the discontent simmer and it ends with the person leaving the organisation.
Open salaries will also address issue of pay disparities between employees of different levels. The disparities will kick in peer pressure and if not formally, will bring in an informal pressure to ensure that salaries are not very disparate, both inter and intra grade. Most importantly open salaries send out a signal to the employees that they can talk and discuss salaries. It is not a taboo subject and for HR guys, it is not something that can be discussed with employee at the time of exit interview only.