[UK] Total salary transparency has pros and cons [UK] Total salary transparency has pros and cons

[UK] Total salary transparency has pros and cons
17 May 2019

Disclosing or earnings to co-workers, though a powerful act, can have its pitfalls, Financial Times reports.

Speaking to the publication Melanie Simms - professor of work and employment at Glasgow University’s Adam Smith Business School - said that revealing your salary to a colleague is one of the “most subversive acts” a worker can perform. Organisations work “very hard” to make pay opaque, Professor Simms said. “They know they can’t always justify differences. It’s in [their] interest as an employer not to be open about these things.”

Alison Green - the US management consultant behind the site Ask A Manager - has compiled an anonymous database on pay. She believes secrecy puts workers at a huge disadvantage in negotiating salary and says, “It also makes it far harder to uncover pay disparities by gender or race.” Professor Simms had previously found benefit in having the difficult conversation about salary levels with peers. She said, “Almost any conversation that gives a number to your worth comes with [baggage]; it can be emotional, you think your peers will judge you.”

With social media came the lowering of standards around privacy. Websites like Glassdoor and Salary Expert offer employees the chance to see information about pay. Additionally, legislation has put pay under public scrutiny. In the US and UK, listed companies are must publish their pay ratio between chief executives and employees’ averages. Gender pay gap reporting has begun in the UK and France. And a new law in Germany permits women to request the median salary of a group of at least six men doing similar work, and vice versa.

Publishing pay information can have a disruptive impact. In 2017, the BBC revealed that two-thirds of its highest paid stars were men. In 2018, Carrie Gracie resigned her post as China editor. She wrote in an open letter that the broadcaster was “breaking equality law and resisting pressure for a fair and transparent pay structure”. In March, reacting to complaints, the Equality and Human Rights Commission launched an investigation into unequal pay at the broadcaster.

The BBC admitted historic equal pay cases but subsequent independent reviews “did not find systemic issues of pay discrimination” and the broadcaster is making “improvements to pay structures”.

Ruben Kostucki is chief operating officer at Makers Academy, a software developers’ training company. Makers Academy employs 50 workers and has had pay transparency since the company was founded in 2013. He believes pay transparency gives workers clarity about their goals. While transparency is “probably fairer”, Mr Kostucki says, “I don’t want anyone to think it’s a magic bullet. We are not trying to make everyone happy but be open and honest with employees.” “We don’t put everyone’s salaries on a whiteboard every day, it just means they are accessible. Most people don’t care. We’ve got better things to do.”

Belgium continues to drop down 'highest salaries in Europe' list

Australia industries offering the strongest salaries

How to structure salary packages in China

Disclosing or earnings to co-workers, though a powerful act, can have its pitfalls, Financial Times reports.

Speaking to the publication Melanie Simms - professor of work and employment at Glasgow University’s Adam Smith Business School - said that revealing your salary to a colleague is one of the “most subversive acts” a worker can perform. Organisations work “very hard” to make pay opaque, Professor Simms said. “They know they can’t always justify differences. It’s in [their] interest as an employer not to be open about these things.”

Alison Green - the US management consultant behind the site Ask A Manager - has compiled an anonymous database on pay. She believes secrecy puts workers at a huge disadvantage in negotiating salary and says, “It also makes it far harder to uncover pay disparities by gender or race.” Professor Simms had previously found benefit in having the difficult conversation about salary levels with peers. She said, “Almost any conversation that gives a number to your worth comes with [baggage]; it can be emotional, you think your peers will judge you.”

With social media came the lowering of standards around privacy. Websites like Glassdoor and Salary Expert offer employees the chance to see information about pay. Additionally, legislation has put pay under public scrutiny. In the US and UK, listed companies are must publish their pay ratio between chief executives and employees’ averages. Gender pay gap reporting has begun in the UK and France. And a new law in Germany permits women to request the median salary of a group of at least six men doing similar work, and vice versa.

Publishing pay information can have a disruptive impact. In 2017, the BBC revealed that two-thirds of its highest paid stars were men. In 2018, Carrie Gracie resigned her post as China editor. She wrote in an open letter that the broadcaster was “breaking equality law and resisting pressure for a fair and transparent pay structure”. In March, reacting to complaints, the Equality and Human Rights Commission launched an investigation into unequal pay at the broadcaster.

The BBC admitted historic equal pay cases but subsequent independent reviews “did not find systemic issues of pay discrimination” and the broadcaster is making “improvements to pay structures”.

Ruben Kostucki is chief operating officer at Makers Academy, a software developers’ training company. Makers Academy employs 50 workers and has had pay transparency since the company was founded in 2013. He believes pay transparency gives workers clarity about their goals. While transparency is “probably fairer”, Mr Kostucki says, “I don’t want anyone to think it’s a magic bullet. We are not trying to make everyone happy but be open and honest with employees.” “We don’t put everyone’s salaries on a whiteboard every day, it just means they are accessible. Most people don’t care. We’ve got better things to do.”

Belgium continues to drop down 'highest salaries in Europe' list

Australia industries offering the strongest salaries

How to structure salary packages in China

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