The Value of Being Transparent, Especially When It's Hard(blog.statuspage.io)
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The Value of Being Transparent, Especially When It's Hard
http://blog.statuspage.io/the-value-of-being-transparent-when-its-hard
13 comments
The idea of open salaries is great, but ultimately it turns all salary negotiations into either a promotion or a collective bargaining situation. The former is obviously harder to obtain, and the latter is very much out of fashion. Organising a labour union in tech seems unlikely to become common place in the near term.
So this trend would shift the cards to the employer unreasonably AFAICT, working to keep salaries suppressed.
Remember that when posting for a new position, salaries are pegged to prevalent market rates. Even bad negotiators as a result benefit from the upward pressure on salaries introduced by good negotiators. If all companies started fixing salaries (which is so far the only way I've seen open salaries implemented), a lot of upward pressure on salaries would be removed, harming all employees, not just the good negotiators.
So this trend would shift the cards to the employer unreasonably AFAICT, working to keep salaries suppressed.
Remember that when posting for a new position, salaries are pegged to prevalent market rates. Even bad negotiators as a result benefit from the upward pressure on salaries introduced by good negotiators. If all companies started fixing salaries (which is so far the only way I've seen open salaries implemented), a lot of upward pressure on salaries would be removed, harming all employees, not just the good negotiators.
Good question -- I personally don't know of anyone else who is doing the whole "Open Salaries" thing. Does anyone else?
Ironically, I think all government agencies have open pay scales and everyone knows exactly how much everyone else makes.
How is that "ironic"? Contrary to all anti-government rhetoric, most government agencies are by their nature more transparant than the average startup.
However, it's easy to be transparant about salaries when you deal with collective bargaining and don't have to generate your own revenue.
Especially the latter means that what companies are willing to pay tends to depend on the financial circumstances at the moment of hiring, resulting in differences that cannot be justified by performance or value.
It takes costly rounds of corrections before you can be transparant about that without causing major upheaval when you reveal everyone's salaries. It only works for companies with short, relatively linear history. Everywhere else, salaries tend to diverge over time for many reasons.
However, it's easy to be transparant about salaries when you deal with collective bargaining and don't have to generate your own revenue.
Especially the latter means that what companies are willing to pay tends to depend on the financial circumstances at the moment of hiring, resulting in differences that cannot be justified by performance or value.
It takes costly rounds of corrections before you can be transparant about that without causing major upheaval when you reveal everyone's salaries. It only works for companies with short, relatively linear history. Everywhere else, salaries tend to diverge over time for many reasons.
Open pay scales are a start, but non-transparent salaries can easily hide in there if all you have is pay scales.
You need two things for actual salary transparency:
1) Everyone's actual salary is accessible - as in, the actual amount they're paid each month, the transaction. This way everyone can know that there's nothing unfair hiding in there.
2) The reason why everyone's salary is what it is is transparent and accessible. Otherwise, the unfairness moves to how people are assigned to different salary bands. "John got assigned to Salary Band E3 because he plays golf with the boss" should not be a possible scenario. If it is, you don't have transparent salaries.
Compensation isn't just made up of numbers, it's made up of explanations too.
You need two things for actual salary transparency:
1) Everyone's actual salary is accessible - as in, the actual amount they're paid each month, the transaction. This way everyone can know that there's nothing unfair hiding in there.
2) The reason why everyone's salary is what it is is transparent and accessible. Otherwise, the unfairness moves to how people are assigned to different salary bands. "John got assigned to Salary Band E3 because he plays golf with the boss" should not be a possible scenario. If it is, you don't have transparent salaries.
Compensation isn't just made up of numbers, it's made up of explanations too.
I think this level of detail is pretty good, even though it doesn't have specific transactions necessarily:
http://seethroughny.net/index.php?cID=375
AFAIK this is compiled by a non-governmental organization however.
http://seethroughny.net/index.php?cID=375
AFAIK this is compiled by a non-governmental organization however.
1.) No, that's asinine. Look up the tax records of someone if you want to know that information. There are reasons people would want to keep their paycheck private, for very legitimate reasons.
2.) That first sentence doesn't make any sense. The second sentence is also asinine. You get on a pay band based on merit at work. If that isn't the case, or if you don't like politics at work, find a new job.. or realize there will always be politics at work.
I'm not sure if you're a huge privacy advocate, but if you are, these ideas are a direct contradiction to privacy. Can't have my phone metadata, but if I can't see your pay stub life isn't fair.
2.) That first sentence doesn't make any sense. The second sentence is also asinine. You get on a pay band based on merit at work. If that isn't the case, or if you don't like politics at work, find a new job.. or realize there will always be politics at work.
I'm not sure if you're a huge privacy advocate, but if you are, these ideas are a direct contradiction to privacy. Can't have my phone metadata, but if I can't see your pay stub life isn't fair.
Maybe not in the same category, but the University of Illinois system has a site where you can look up anyone's salary.
I think all universities might be required to publish employee salary but I might be wrong.
U of Md. College Park published all employee salaries every year. I always was entertained looking up bad profs. and seeing how much (or little) they made.
My company (GrantTree) does totally open salaries. AMA...
I agree that open salaries are really really nice.
I am only aware of Balanced Payments that used to have it, but unfortunately they've recently shut down.
Chad Whitacre of Gratipay may know if any other companies do this by now.
I am only aware of Balanced Payments that used to have it, but unfortunately they've recently shut down.
Chad Whitacre of Gratipay may know if any other companies do this by now.
However, I found the most interesting link the one about open salaries [1] - are there any other businesses doing similar things? I'd be inclined to consider it a very strong mark in their favour as a workplace.
[1] https://open.bufferapp.com/introducing-open-salaries-at-buff...