Why Is It Important for Employees to Know About the Salary of Colleagues?

Money, as a universal subject, causes the same comprehensive interest. Our desire to know about other people’s incomes has different root causes. Someone sees this as a motivational impulse, someone needs to blame the injustice of the bourgeois world for their own failures, and some just want to satisfy their curiosity.

The topic of salary still seems indecent and taboo by many layers of our society. “How much do you earn?” this question can be asked to the friend, girlfriend, wife, or husband. But asking a stranger about this is moveton.

But what about colleagues? Some companies prohibit their employees from disclosing information about their salaries within the team, and sometimes outside it. The leaders of these organizations are afraid of such consequences as an impaired discipline, complaints, conflicts, dismissal, and, a broken personnel policy. But according to many leading managers transparency of salaries of employees within the company can benefit both the staff and the organization.

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1 Is It Important for Employees to Know About the Salary of Colleagues?

1.1 1. Salary Transparency in the Team Can Strengthen Feelings of Justice and Cooperation Within the Organization

1.2 2. Secrecy Is an Intricate Way for an Employer to Save on Subordinates

1.3 3. Secrecy of Salary Also Makes It Easier to Conceal Discrimination

1.4 4. When People Know How Much Their Colleagues Get, They Try to Improve Their Productivity

Is It Important for Employees to Know About the Salary of Colleagues?

1. Salary Transparency in the Team Can Strengthen Feelings of Justice and Cooperation Within the Organization

In the course of many years of experience working with entrepreneurs of various levels top business consulting firms convinced that some managers cast doubt on the generally accepted management standards. The same applies to such a controversial topic as the confidentiality of employee wages. When people do not know how much their colleagues earn, they are likely to think that they are underpaid and some may have thoughts of discrimination within the team.

A good example in this case company Vanity Fair. The leadership of this magazine a few decades ago introduced a strict rule on the “prohibition of discussion of salary among employees”. But the employees didn’t really like this restriction and the next day they came to work with badges on which everyone’s salary was indicated. This begs the logical question “Why do some organizations prefer to keep their employees’ income secret?”

2. Secrecy Is an Intricate Way for an Employer to Save on Subordinates

Maintaining confidentiality leads to what economists call “information asymmetry”. This is a situation where one side knows more than the other. Think about how many workers will demand salary increases if they become aware of the salaries of their colleagues. According to a survey conducted in 2015, two-thirds of working people believe that they are underpaid.

3. Secrecy of Salary Also Makes It Easier to Conceal Discrimination

According to scientific data, in 2011 the pay gap between men and women was 23%. Today this has significantly decreased but the fact of the uneven distribution of salaries by gender still remains. In the United States, the desire to hide the unequal distribution of salaries by gender or other grounds makes some companies prohibit the disclosure of information about their income.

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4. When People Know How Much Their Colleagues Get, They Try to Improve Their Productivity

This is perhaps the main argument in favor of the openness of salary information. In most cases, when an employee sees that a colleague is getting more because of higher qualifications, he has an additional incentive to improve work. In addition, salary transparency demonstrates the availability of financial incentives for professionalism, which is another catalyst for success professional growing.