Why you should know how much your coworkers get paid | David Burkus
Curated from: TED
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The Salary Sharing Taboo
Most of us are uncomfortable with the idea of broadcasting our salary. We're not supposed to discuss that with our office neighbors. The assumed reason is that if everybody knew what everybody got paid, then all hell would break loose.
There'd be arguments, there'd be fights, there might even be a few people who quit. But what if secrecy is actually the reason for all that strife? And what would happen if we removed that secrecy? It turns out that pay transparency -- sharing salaries openly across a company -- makes for a better workplace for both the employee and for the organization.
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Keeping The Salaries Secret
When people don't know how their pay compares to their peers, they're more likely to feel underpaid and maybe even discriminated against.
For companies, pay secrecy is actually a way to save a lot of money. Keeping salaries secret leads to what economists call "information asymmetry." This is a situation where, in a negotiation, one party has loads more information than the other. And in hiring or promotion or annual raise discussions, an employer can use that secrecy to save a lot of money. Imagine how much better you could negotiate for a raise if you knew everybody's salary.
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The Dangers of Information Asymmetry
- Economists warn that information asymmetry can cause markets to go awry.
- Information asymmetry makes it easier to ignore the discrimination that's already present in the market today (the gender wage gap between men and women).
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Openness Ensures Fairness
Letting people know what you make might feel uncomfortable, but isn't it less uncomfortable than always wondering if you're being discriminated against? Openness remains the best way to ensure fairness, and pay transparency does that.
That's why entrepreneurial leaders and corporate leaders have been experimenting with sharing salaries for years. And studies show that, when people know how they're being paid and how that pay compares to their peers', they're more likely to work hard to improve their performance, more likely to be engaged, and they're less likely to quit.
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Pay Transparency Takes a Lot of Forms
It's not one size fits all. Some post their salaries for all to see. Some only keep it inside the company. Some post the formula for calculating pay, and others post the pay levels and affix everybody to that level.
So you don't have to make signs for all of your employees to wear around the office. And you don't have to be the only one wearing a sign that you made at home. But we can all take greater steps towards pay transparency.
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