For decades, salary discussions have traditionally been conducted behind closed doors. In fact, discussing the size of one’s paycheck is often viewed as taboo, even with close friends and family. While the topic still needs to be approached gingerly, it’s becoming a more acceptable point of discussion at some companies, including Buffer.
According to a 2016 Glassdoor survey, 36% of global respondents said their company shares salary information internally. In what may come as a surprise to many, 70% responded that salary transparency is good for employee satisfaction and 72% also believe it’s good for business.
Benefits of Salary Transparency
People are Motivated to Do Better Work
Employees are often compelled to work harder when their peers know how much they’re earning. No one wants to be accused of contributing less than someone who doesn’t earn as much money, so people are eager to show they’re earning their paycheck — and worth every penny.
Job Satisfaction Increases When Salary Isn’t a Mystery
When people know how their salary was determined, they feel a deeper level of trust with their employer, according to the PayScale 2015 Compensation Best Practices Report. When employees can stop worrying about whether their salary is fair, they’re able to focus more energy on work.
Salary Transparency Drawbacks
Some Companies Can’t Afford to Pay Market Salaries
Companies with limited budgets can receive backlash from sharing salary data, because if people realize the whole team is underpaid, they’re likely to head elsewhere. Some of these organizations offer other valuable benefits to make up for lack of pay, but they can’t be affixed to a dollar amount.
Salary Discrepancies Can Cause People to Feel Undervalued
When one employee realizes a colleague is earning more than them, they may become resentful. If the two employees share a similar role on the team or the person earning less feels they contribute more than a co-worker with a larger paycheck, bruised egos will ensue.
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