The company with the most transparent pay process in the US is German discount supermarket chain Aldi, an employee survey has revealed.
According to research conducted by Payscale, 85% of Aldi staff said that pay transparency was high at the firm, compared with 70% from management consultancy McKinsey & Co and 70% at poultry producer Sanderson Farms, which ranked second and third respectively.
Restaurants and grocery stores dominated the top 10, possibly because their relatively narrow profit margins make transparency a distinct advantage in these highly competitive industries.
PayScale vice president Lydia Frank said that many firms were recognising the benefits of pay transparency. "People are more likely to trust their employer if it’s clear how and why they are paid the compensation they earn," she said. "There really is no downside to sharing your organisation’s approach to compensation, but there is a well-researched downside to remaining silent."
Other research also suggests there could be big business benefits to being open about salaries. A study from the US-based National Bureau of Economic Research revealed that although employees do not work as hard if they think they earn less than co-workers, they tend to do so if they know their bosses receive large salaries. In fact, a 1% increase in perceived managerial pay increases the number of hours worked by 0.15% – possibly because it inspires people to aim for higher wages for themselves in future.
But a report from Love Energy Savings indicates that too much pay transparency could also have a negative effect. It found that just under two thirds of workers were not comfortable with total transparency at work and speculated this situation could be due to fears of potential conflict. A mere 26.9% of respondents wanted everyone’s salary information to be shared, while only 7.3% were keen to know the salaries of senior management staff alone.
Phil Foster, managing director of Love Energy Savings, told HR Grapevine: "It’s possible that some workers anticipate a backlash from having their salaries revealed to others, a fear that currently trumps the potential good that transparency can bring."
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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The company with the most transparent pay process in the US is German discount supermarket chain Aldi, an employee survey has revealed.
According to research conducted by Payscale, 85% of Aldi staff said that pay transparency was high at the firm, compared with 70% from management consultancy McKinsey & Co and 70% at poultry producer Sanderson Farms, which ranked second and third respectively.
Restaurants and grocery stores dominated the top 10, possibly because their relatively narrow profit margins make transparency a distinct advantage in these highly competitive industries.
PayScale vice president Lydia Frank said that many firms were recognising the benefits of pay transparency. "People are more likely to trust their employer if it’s clear how and why they are paid the compensation they earn," she said. "There really is no downside to sharing your organisation’s approach to compensation, but there is a well-researched downside to remaining silent."
Other research also suggests there could be big business benefits to being open about salaries. A study from the US-based National Bureau of Economic Research revealed that although employees do not work as hard if they think they earn less than co-workers, they tend to do so if they know their bosses receive large salaries. In fact, a 1% increase in perceived managerial pay increases the number of hours worked by 0.15% – possibly because it inspires people to aim for higher wages for themselves in future.
But a report from Love Energy Savings indicates that too much pay transparency could also have a negative effect. It found that just under two thirds of workers were not comfortable with total transparency at work and speculated this situation could be due to fears of potential conflict. A mere 26.9% of respondents wanted everyone’s salary information to be shared, while only 7.3% were keen to know the salaries of senior management staff alone.
Phil Foster, managing director of Love Energy Savings, told HR Grapevine: "It’s possible that some workers anticipate a backlash from having their salaries revealed to others, a fear that currently trumps the potential good that transparency can bring."
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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