Jena McGregor On Leadership: Salary information
By Jena McGregor,
Sharing salary details has long been one of the great taboos in corporate America, ranking even higher on the list of “what not to do at work” than getting drunk at the holiday party or crying during a performance review. But for more and more employees, it’s not just an office no-no. A new paper by the Institute for Women’s Policy Research found that almost half of all workers in the United States “are either contractually forbidden or strongly discouraged from discussing their pay with their colleagues,” making it harder for employees to determine whether they’re being discriminated against.
That may seem like a strikingly high number, especially if you’re one of the many nonprofit workers or federal employees who toil amid strictly defined pay bands or have a good idea of what your cubicle-wall neighbor makes just because you have access to a database.
Whether such pay secrecy is a good thing is the subject of debate. Human-resources thinker Tammy Erickson says that more companies should open the books and share what everybody makes. Such transparency can lead to “a pretty healthy obsession” with increasing the quality and quantity of work and lead to more “adult arrangements” between workers and their supervisors. Others think sharing pay particulars helps employees assess their value — and that the only people who benefit from secret salaries are in the HR department, because they can cover up their mistakes.
Not so, say researchers from Berkeley and Princeton, who found that employees who know what their peers make — especially if the salaries are below median earnings — were more dissatisfied with their jobs than peers who knew nothing. Because we’re constantly comparing ourselves with others, such information makes us disgruntled and anxious rather than more motivated.
Although I’m usually of the mind that more transparency is good, when it comes to take-home pay, I know that “rational economic man” can become a little, well, irrational. And although I love the idea at least in theory, of companies revealing enough salary information to show whether they’re paying women less, I know that has about as much of a chance of happening as an across-the-board pay raise in a struggling economy.
I’m with Erickson. We could all use more “adult arrangements” at the office, and employees should be free to decide whether they want to broach that long-held taboo.
McGregor writes about leading in a changing world at washingtonpost.com/blogs/post-leadership.