Is Salary Secrecy Bliss?

It is known that everyone has an inherent urge to find out what others are making, however, when the question “how much are you getting?” is asked directly, it leaves most people disconcerted.

So who wants this cloud of secrecy to exist, the employer or the employees? The obvious answer is that the employer benefits more to keep salaries a secret. The reasons may vary: Employers see a salary range as a means to quantify differences in education, work experience, growth potential and performance and then ranking each employee on that scale accordingly. However, employees may view these salary ranges differently and may think that the company is being unfair to them.

The employer’s perspective: Employers think that if salaries were made public this would lead to an endless battle of negotiating and contesting with the company’s HR and demanding justification for one’s offered salary. Thus, most companies decide to leave this ‘Pandora’s Box’ unopened.

The employee’s perspective: While employees may see salary transparency as bargaining power, the HR departments popularly believe that it will promote a feeling of hostility within the company. However, the upside of salary transparency is that it can work as a motivator for some, provided that the company has a clearly defined and transparent performance structure that warrants that specified salary range. With an attractive salary structure that is transparent, a company can also establish itself as a top employer, draw more talent and dissuade current employees from leaving.