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08/26/2014

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The logical end point to this line of inquiry:

http://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2014/general-schedule/

No nuance, no judgement, no discretion, no recognition of qualitative difference, effort, performance, or efficacy.

Oh, and Jim: no offence is intended, and I sincerely hope none will be taken, but until we can have the state arrest, try and imprison someone for practicing compensation without a CCP, it ill behooves us to refer to what we do as a profession.

No affected parties here, I'm sure,but pay transparency has been an anathema to comp pros and senior execs alike, who have been drinking the salary secrecy cool-aid for most of their professional lives. They can't help it; it's been hard-wired into their psyche, and change is both threatening and overwhelming.

As I've mentioned on this blog and others, the PT train has left the station, and it ain't coming back. It hasn't gone far, and it's not traveling very fast, yet, but it's moving. Denying that reality will only make a difficult exercise more painful, increasing the likelihood of collateral damage.

If history is any indicator, most organizations will resist until forced onto the transparency path, either as a reaction to competitive pressure or talent exit, or both. Chaos is almost guaranteed in those circumstances, and the process won't be pretty.

As they say in most 12-step programs, acceptance is the key to recovery. Bold action taken before the tipping point will help one avoid getting run over by the train.

Jim, can you help me understand what the big deal is about pay transparency? Do companies really fire employees for talking about their pay with each other now? Is there really a push from employees to know what other employees are making? Even if you post everyone salary can’t we train managers how to deal with employees that want to compare their pay to other employees? Can’t they be taught to limit the conversation to the single employees pay and performance? If pay was posted for all to see would the issue be a flash in the pan? Employees would be curious at first and then it would normalize.

Are we concerned that it will lead to less pay difference? What if it leads to greater use of pay reductions? If an employee is overpaid compare to the value of the job and/or their performance why not reduce their pay so other employees can’t use it as a bad example to have their pay increased?

As compensation professional we deal with pay transparency within our own teams on a daily basis so I may be too close to the issue to see the bigger concern.

Trevor - Even though your question was addressed to Jim, I'll weigh in. Firing employees for discussing their compensation is (I hope) an antiquated practice, but I'll bet it still exists as a policy in some employee handbooks out there. Training modules on compensation issues should absolutely be part of a Manager's development program, although the historical effectiveness of Management training programs, in general, is questionable.

In my experience, the practice of pay reductions is bad juju; employees see it as being strapped to the whipping post for past practices they had no control over.

The move towards transparency is really a paradigm shift, being driven by the workforce desire for greater autonomy and more control over their work life. Equity and fairness play into it as well. Transparent compensation practices are much more than a flash in the pan; rather, they are a part of what will become the 'new normal', and a critical piece of tomorrow's workplace.

Thanks John, I still don't see the big deal. Again, maybe because I'm used to pay transparency within my own teams when leading compensation teams.

I think it will put more pressure on the employees that are paid more then the value they bring to find a way to step up to save face with their peers. I think it will also put more pressure on creating better performance rating and management programs.

Agree with Trevor. Pay secrecy is a minor issue. Most employees don't care about it and many use outside comparisons to form their opinion about the correctness of their pay level. There are no valid studies to show that more pay information improves morale and makes employees work harder.

When the state colleges in California went to an open pay system where salaries were available publically by employee name, the employees had a lukewarm reaction.

Blaine - I appreciate your perspective, and did not know that California's state colleges posted employee salaries. I suspect you are correct regarding valid studies showing that more pay information equals improved morale and work habits. I also suspect that one reason for the lack of such studies is because not very many commercial enterprises have an 'open' pay system.

I disagree with your observation that most employees don't care about it, and question the veracity of 'outside comparisons' as they may relate to someone's pay. The fact that employees consult external resources for pay information indicates that they do indeed care about it. Forcing employees to resort to such resources for pay information does not speak well for the internal HR/Comp organization or the compensation system currently in place.

I believe pay secrecy is a big deal, and employees have learned that questioning the practices within their company is taboo. Most Employee Satisfaction surveys only query whether one is satisfied with their pay; they don't query issues surrounding information about pay practices. Big difference.

Agree with Trevor and Blaine. This is a minor issue. When California colleges went from a secret to an open pay system, the job satisfaction and turnover intentions of employees who accessed colleagues salaries were no different from employees who didn't access them. Other research shows that chronic complainers favor open pay systems and that better performers prefer secret pay systems.

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