Salary Transparency-Show Me Yours and I’ll Show You Mine?

ABC’s 20/20 recently ran a story on salary transparency and interviewed Suzie Orman and Penelope Trunk who advocate for full disclosure of all employees’ salaries. I can’t agree that knowing the exact salaries of everyone in your office is a sound management practice and I can’t imagine it would fuel retention or performance management strategies. In my opinion, the story misses the point of what salary transparency should be.  Salary transparency should be the disclosure of the possible range of salaries one can earn in a given position, not the exact salaries of each person in that position or department. This type of transparency can actually motivate and retain employees because it gives them a meaningful perspective on how the job is benchmarked and valued in the organization and what the financial trajectory in the position will be. Check out the Compensation Force blog post about how pay transparency can be better managed in an organization to better understand this process. Salary transparency can also be a great recruiting tool and employment differentiator. Knowing the salary range of a position is one way to know if the job is a potential fit. Wouldn’t you be more likely to apply to a position where you had an idea of what the salary range was? But have you ever noticed how many employers who post their jobs on the boards fail to include a salary range? My guess is that this is because ranges are not shared internally in the organization and posting the ranges would reveal inconsistencies in the current employees’ salaries. Every day I meet people from big, well known companies where employees never knew what their potential earning power in a position was.I keep hoping to meet that person who worked for a company that was forward-thinking enough to share their salary ranges. Unfortunately, I’m still waiting.