Transparent compensation
Located in: Organization
My Thoughts
While transparent salaries does decrease the opportunity for pay discrimination and helps with Diversity Equity and Inclusion initiatives, I believe at the end of the day it's detrimental for an organization.
- While Hiring it's important to share numbers with the candidate rather than have them state their expectations.
- Focus on transparent process not transparent numbers
Pros and Cons
Pros
- Avoids pay discrimination, it's hard/impossible to justify different salaries for people having the same impact on the business.
- People don't have to feel secretive about their salary. It removes a "secretive" part of the culture.
Cons
- As a manager (decider of compensation), it's hard to understand an individual's impact on the organization. It is likely the individual will overestimate their impact.
- It is likely people will be jealous of other folks.
Implementing Transparent Compensation
Examples
- Whole Foods has been transparent about compensation since 1986, but the information is only shared with employees.
Buffer
Most recent article about their compensation philosophy.
Based on the principles:
- Transparency: We openly share our approach and all salaries to create trust, hold ourselves accountable, and serve as a resource for the industry.
- Simplicity: We aim to maintain an easy-to-understand formula that allows anyone to easily see how we arrive at any individual salary.
- Fairness: We ensure that those with the same role and responsibilities who are at the same experience level are paid equitably.
- Generosity: We pay above market to attract the team we need, thrive as individuals, and avoid exceptions and inequity resulting from negotiation.