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I like your point that pay disclosure "is something that companies should aspire to."

In my experience one of the biggest hurdles to pay disclosure is the lack of consistency in pay at many companies. If they opened up their information there would be more questions than answers.

Regardless of whether a company DOES make pay an open issue (something I would not always support), they SHOULD have put things together well enough that if disclosure was required they would not be embarrassed (or worse).

Thanks for the comment here, Dan.

For many companies internal and in some cases external equity issues across departments (and in some cases the entire enterprise) can make disclosure risky from both employee engagement and EEOC perspectives.

If a company wants to avoid messy salary compression issues and broader external market challenges, the smartest thing for them to do is to introduce a comp structure early and then let it evolve with the business (as opposed to waiting until problems manifest themselves in the form of retention and engagement challenges).



Rory - I appreciate your comments on compensation disclosure. I've been advocating for more pay transparency, on this blog and others, for quite a while. The risks you site are real, but will eventually be outweighed by the risks of keeping salary information in the closet. Frankly, I think its inevitable; the millennial generation entering the workforce, and those that follow, will become increasingly intolerant of pay secrecy. Their view of corporate responsibility, and accountability, differs in significant ways from that of their predecessors, and organizational credibility will be a key factor in employment decisions. In that context, companies would be wise to assess their compensation practices against the philosophy they articulate, and begin to take whatever steps are necessary to align them. This train is leaving the station, and those left behind will find it increasingly difficult to compete.

Really good points, John.

For a cultural standpoint millennials and generation Z are simply going to demand greater transparency around pay. As such, organizations that don't take steps to resolve compression issues now are going to have to absorb huge costs to catch up when societal norms around disclosure force them to bring their practices to light.

Thanks for sharing here.



Re: Pay disclosure: One partial solution is to provide the employee a summary distribution of employees' pay, expressed as a histogram of their percent of midpoint. This could be one for all employees, one for the department, or one for the job classification, etc., depending on the size of the organization and the HR/Comp. department.

Then there could be a discussion with the individual about where that individual's pay lies as a percent of their midpoint, what can be done about it, and what is a reasonable time frame to address any issues.

That's a really interesting communication strategy, John.

Would you ever see this as a general use tool for the entire population, or is it only practical/viable as part of a larger discussion with disengaged colleagues expressing displeasure around their pay?



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