How Did You Figure My Pay and What Are You Going to Do About It?

by Michael Haberman on October 16, 2007 · 1 comment


“Today’s (and tomorrow’s) employees are not inclined to believe and accept a pay program that is shrouded in mystery.”

This is how author and consultant Ann Bares ends her blog, Compensation Force, on the disconnect between employees and employers in dealing with compensation practices. This is one more example of how the workplace has changed with the generational differences. It used to be that no one ever questioned what they were paid or why. And companies had (and many still have) a prohibition against sharing how much you make with a coworker. BTW, this is a violation of the National Labor Relations Act if the sharing of such information is deemed to be concerted activity by employees.

Bares states that a study entitled Emerging Workforce Study (catchy title) shows “a significant divide between employees and employers on compensation. Three quarters (75%) of the employees surveyed cite compensation as the thing most crucial to retaining them, but only 26% are currently satisfied with this aspect of their job.” Bares feels this is indicative of different attitudes by younger generation towards pay, and as she says “Good or bad news, what it adds up to is an employee population that is more inclined to challenge and/or disbelieve an employer’s pay data, practices and policies than in the past. “

She has a warning to HR professionals, one that I hardily agree with, that we must be prepared to address this challenge. Her solution is transparency in the pay program. As she says “openly sharing how the pay program is built, where the data used to build it comes from, how it is designed to operate, and what its philosophical underpinnings are meant to be. And – certainly – I think individual employees should fully understand how the program applies to them (i.e., their salary range, etc.).” I have always been an advocate of such transparency. What people make is no secret. People talk, or whisper, or see things, or some how figure what everyone else is making. And if they don’t know they generally inflate what they think the other person is making, which is worse for the organization.

So if you are one of those organizations that shrouds the pay system in mystery you may be facing a challenge in the coming years as your workforce shifts to the next generations.
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{ 1 comment… read it below or add one }

Ann October 18, 2007 at 2:31 pm

Michael:

I appreciate your points on pay transparency – and thanks for the link back to my post.

See also another great post on this topic by the Chief Happiness Officer, Alexander Kjerulf – link below:
http://positivesharing.com/2006/08/why-secret-salaries-are-a-baaaaaad-idea/

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