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Your Take: Knowing Everyone Else’s Salary

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PaycheckThe New York Times posted an interesting article about salary transparency in late August and I thought it would make some fantastic Your Take fodder.

Salary transparency doesn’t bother me because my primary goal is to complete my job and ensure that my team completes our job. If someone on the team isn’t pulling their weight, it doesn’t matter what their salary is – they’re overpaid. If someone is pulling their weight, you can pay them more! I believe my salary is tied to my performance and my performance is tied to my team’s performance, so as long as all the cogs in the wheel are running well together then we all win.

Can I see a scenario where people are pissed off that someone next to them, doing the same job, is being paid more? Yes, but remember that people don’t set their own salaries (unless you’re in Congress!). If you feel you deserve more, you need to appeal to your boss, not be upset with your coworker.

I’m not saying transparency is a great idea or a terrible idea (I am aware that emotions do come into play) but I think that getting to a point where compensation isn’t such a big deal would be kind of nice.

Your thoughts?

(Photo: oyf)

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19 Responses to “Your Take: Knowing Everyone Else’s Salary”

  1. Transparency can help build trust between management and the employees, if everyone is paid fairly. But if they’re not paid fairly, then discovery of the unfairness can be devastating to all.

    I once discovered in my first “real” job that I was being paid $2+ more per hour than my colleague – the guy who was at least my peer, and certainly more senior in the job. My only “qualification” over him was that I planned on going to law school, and our manager was a lawyer who viewed me as more her equal and therefore more valuable. But the reality was that the value wasn’t there yet, and therefore the discrepancy was quite unfair.

    We were already somewhat distrustful of our manager, and this obviously didn’t help. Needless to say, she wasn’t getting our best performance (especially my colleague’s) and he left shortly thereafter.

  2. Patrick says:

    I think not knowing everybody else’s salaries is to the advantage of employers. Even though somebody may be content with their salary, if he/she knew that somebody who is in the same position was making way more money or working less hours, it would make a more fair market. It seems like people get offended when you talk about salaries and I just don’t get it. In my opinion, it shouldn’t cause conflict because it should only give the person being screwed more incentive to find a better job with higher salary or better hours.

  3. Dave says:

    I definately think its a double edge sword.

    As an employee, knowing everyone’s salary around you (your peers, your boss) is a great tool for knowing your value to the company. It would be helpful in salary negotiation, it gives you a baseline for asking for a raise and how much. It also helps you decide if a company is right for you career wise – if you know that your boss only makes $10k more than you and he works twice as many hours and is miserable, it would be in your benefit to look elsewhere for career and promotion opportunities.

    As an employer, I don’t see many positives. Even though transparancy is nice, I can only see how it would ultimately lead to unhappy employees. Someone who finds out that their peers make more money would certainly have a loss of productivity, and could easily justify the reduced effort becasue they make less money. I also think that it would be hard for a manager if they have have to justify to his employees why someone makes more than someone else, why someone else got a bigger raise, etc.

  4. I don’t think it is necessary for employees to know about each others’ business. It has the potential for creating some very contentious working environments. Nepotism is a fairly common example of such a situation where a family member or friend is given preference in terms of salary, benefits, and leeway over regular workers. Employees should only be concerned with their own production regardless of what another is making.

    In Cathy’s example, her “ceiling” was higher than her colleague’s which was cause for the discrepancy in salary. This is common in business because employers are more interested in workers who possess the drive to improve themselves and advance in their field. Many employers see it as a way to encourage such achievements. In some instances certain employees are quite comfortable in their current roles and do not want to continue with their education or do not want responsibility that is greater than that which they already have.

    In Dave’s example, misery is relative. Some people are going to be miserable in their career no matter what salary they are paid, it is a simple fact of life. What if the boss made $100,000 more but still worked twice as many hours and was still miserable? It may change the view on the company as well as the boss, but the fact remains that know his/her salary doesn’t always tell the whole story.

  5. Miss M says:

    In my job the salaries are often public knowledge. When we bid on public projects the bids (which include cost estimates with salaries) are part of the public record. At my current project there are spreadsheets with all the salaries by job title for doing cost estimates. Everyone has access to these spreadsheets, that’s how I know someone with less qualifications is making more than me!

    There was a big stink recently when a local paper put together a database of city employees and their salaries, if you knew someone who worked at the city you simply input their name. City employees were furious, but I believe their salaries were public record and that is how the paper got the information.

  6. urbantux says:

    I think the problem comes from the employer’s side, not the Employee. If I make more than Sally, who does just as good work as me, and she knows it she will ask to make a comparable amount. When no one knows what the other is making some people will be more content to just keep making what they are making and some people will request and receive raises. Those people who are “Content” make ti it easier for those of us who are willing to negotiate to get a raise. There is more money in the pool because those other guys just didn’t bother to ask. IMHO

  7. I think the employer has the upper hand when salaries are hidden. Only they know all the cards on the table. However, I am traditional in the fact that I don’t think what I make is anyone else’s business or concern.

  8. Amanda says:

    Unfortunately, emotions do come into play. I think many people would find it hard to not be judgemental when looking at the salaries of their coworkers. It definitely has the potential to breed resentment.

  9. Cap says:

    Between good friends, not so much problem I would think. Between employees? Everyone’s already mentioned the various negatives.

    Agree that some level of transparency is nice… the Internet has already made such numbers a little bit more accessible — but it’ll never be to the level where people discuss openly about their salary, I think.

    There’s just too many factors tied to a salary an employee’s work performance: their experience, potentials, connections, special skill set… etc.

    I would think that for it to reach the point where everyone can discuss it openly, they’d have to discuss why they’re getting (or giving) so and so openly too.

  10. I too think hidden salaries gives the employer the upper hand though I’m not sure I’d like it if it was open. Then again, it’d be nice to point the finger at people who are earning more than you who are much worse :-)

  11. Salary transparency would go a long way toward eliminating the discrepancy between men’s salaries and womens.

    As an employee and a consultant, I use every opportunity to find out what my colleagues, managers, and competitors are making, just as I try to find out in business what my competitors are charging for their products and services.

    Economic rationalism works best in a world of perfect information.

    Incidentally, I posted a tip on my blog not long ago about this: the highest paid employees, and sometimes external contractors are generally listed with their salaries on a US not-for-profit organization’s income tax returne (or 990 form).

    That’s good information to have.

  12. Lots says:

    The problem is salary transparency is that it encourage that corporate (or other) rat race…not only would you have to justify your salary to yourself and your boss, you would also be affected by how your peers view you…

    For example, let’s say salaries were completely transparent in a corporation that bases salaries strictly off merit/value of the work you do, those who earned less than others would be looked down upon and possibly discriminated against…

    Although salary transparency would be good in an ideal meritocratic world, it just wouldn’t work in society at the moment…

  13. bill says:

    I work for the federal government. We all know eachothers salaries. Even friends and family can look it up on the web.

    http://php.app.com/fed_employees/search.php

    It really doesn’t make much of a difference and the hypothetical issues other commenters have come up with just don’t happen.

    Also most school teacher salaries are public information and can be found on the web.

  14. Sam says:

    Same as Bill above. I work for the State govt. and so our salaries are all public :)

  15. Nicol says:

    i don’t agree that transparency is a good idea. I am an employer and it causes serious problems when people know how much each employee makes. I am here to tell you that everyone thinks they are a better worker than their coworkers. Really, who is going to admit, “self, you know what, joe coworker is such a better employee than me. Really, he deserves to make more than me.” There are so many different factors that go into deciding someone’s salary: experience, expertise in different facets of the position (perhaps one facet is “worth” more that another facet), education, attitude… you know, all the different categories on a review. I understand the need for governments to be open with how they spend taxpayers money but in the private sector, it should be nobody’s business but your own.

  16. Gates VP says:

    FTA: If people are paid what they are worth, there is no reason for people to feel uncomfortable about sharing salary information.

    A comment with which I duly agree.

    Nicol:There are so many different factors that go into deciding someone’s salary: experience, expertise in different facets of the position (perhaps one facet is “worth” more that another facet), education, attitude… you know, all the different categories on a review.

    You’re just dodging the issue here, with a bunch of “touchy-feely”.

    Salary all comes back to revenue the employee generates.

    If you can’t clearly quantify these aspects to your employees, then you’re going to consistently get sub-par performance from your teams. Look if I can’t tell you why “Joe” makes more than I do, how am I supposed to know where to find my next raise? On the flip side, if you can’t communicate to me why “Joe” is making more then how am I going to make you more money?

    Again, the employer wants the employee to generate more revenue so that they can take home more money. In exchange, the best employees want a cut of that additional revenue, typically in the form of a “raise” or “bonus”. If the employee doesn’t know how they can make more money, then the employer is losing potential revenue.

    Sure you might anger some people if salary were transparent, but then you’d also provide a beacon for everyone to follow. If you could have 10 people just like the highest paid person in your office, would that really be a bad thing?

  17. It’s better if you don’t know what your colleagues make even though you might want to. I was satisfied with my salary until I found out that someone a work with doing the same job gets paid $500 more than me every month. I’m now dissatisfied and am working to raise my salary, not necessarily for the money, but so that I can be on equal terms with my “rival”. I guess it’s good in a way because it has gotten me to work harder, but I was happier before I knew what she made.

  18. ryan says:

    i work at petsmart and have found out that even though i have worked there for almost 2 years the new hires who know NOTHING about the store or the job are making between 20-50$ a month more than me. needless to say this has resulted in theft, time clock fraud, and generally just a shitty half assed attitude around the work place. the store would be better off if they just gave me a raise.

  19. Widline Tassy says:

    Home depot is one of the greatest company. But some managers don’t know how to handle customers.


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