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09/18/2013

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Interesting to see how some of the new start-ups (Ann's article on transparency) make the entire salary structure available to employees.

I haven't worked with any company that allows employees to view a structure. I have seen companies that tell an employee not only the min/max of his/her job but also the one a step higher. This is done in a career progression discussion and tends to work well.

Otherwise I think managers just don't want to get into a discussion with employees because they frankly don't understand it well enough to explain it themselves. Also the threat of legal action is a deterrent.

Given that executive compensation in public companies is public knowledge, and hourly employees are paid a common hourly rate by job, it has always escaped me why there is a taboo about disclosure of SNE and SE compensation.

As a practical matter, you cannot prevent employees from talking about pay, and if you make a fetish about privacy, you will just end up with more mis- and dis-information about it.

If you aren't willing to post everybody's pay on the bulletin board, you've got something to hide.

Chuck - Compensation transparency is an essential component of the trust factor between employees and their company. Those employers who guard such data do so for the reasons you've stated, as well as the misguided fear that it will somehow put them in a competitive disadvantage in the talent acquisition/retention arena. Jacque makes an excellent observation about management comprehension; you can't explain what you don't understand.

Opening the comp kimono can be difficult because, especially in newer, early stage companies, pay practices are evolving and tend to be individual specific rather than following a standard regimen. Beyond that, as has been observed in this blog, jobs are are changing and being created so rapidly that existing compensation systems are having a hard time keeping up.

Regardless, I believe compensation transparency is gaining momentum, and will be a much more common practice in the not too distant future.

A thought provoking article Chuck. Whilst I am a proud supporter of a transparency model, I do have a strong view that you need to understand your audience to know the right time and extent of transparency that will work in a positive way. Organizational and management maturity are key to the success of a transparent compensation program.

Change management is also key as the transition occurs. Managers and employees need to join the journey to understand the power that is being transferred to them with this new knowledge - and not everyone will agree on what you believe the salary range for their job is! But at least there will be the opportunity for an open dialogue on the situation (rather than the hidden gripes that take place when the detail is not communicated).

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