How Transparent Should Salaries Be?

The internet is now making salary information more transparent and available, which can be useful for companies to know what the market is for similar positions, and what employees may potentially be looking for when negotiating a salary for a new position or getting a raise in an existing one.

But how open should your company be with the salaries of your staff? The Christian Science Monitor, an internationally-recognized publication, recently looked at this question, and Cissy Pau, our Principal Consultant, was quoted in the article, which appears on our media page:

“Sharing specific information about employee salary and benefits is definitely something we do not recommend,” she says. “It raises issues of confidentiality and privacy, and the potential for office gossip and rumors around whose salaries are posted.”

In our opinion, if a company has a good pay and benefits strategy, where the criteria for salary determination and benefits entitlement are clearly defined and communicated, there should be no need to disclose specific salary information.

A sound pay strategy should include considerations such as:

Clarification of where a company wants to pay in comparison to market rates;
How the employer takes into account an employee’s education, experience and other qualifications when determining pay;
Specific eligibility, criteria and measures for bonuses and incentives; and
Fairness and consistency in offering rewards and recognition.

If employees perceive that their employer is paying fairly, they will be less inclined to be concerned about pay issues. At that point, the employer’s priority should be focused on building the culture of company so that it is identified by employees as a great place to work to retain their valuable employees.

For assistance in crafting the pay and benefits strategy for your small- or medium-sized business, contact Vancouver-based human resources experts Clear HR Consulting.