Is there a place for pay transparency in the workplace?

In the past, talking about pay was a workplace taboo. However as the push towards pay equality grows stronger, companies are shifting towards a transparent payroll. Pay transparency is what it says, a visible and publicly available database stating employees’ salaries. While  concerns of confidentially immediately pop to mind, most of the information is nonspecific, showing the benchmark for roles rather than person and salary identification. From this, employees are capable of seeing where they sit within their peer group remuneration bracket. Determining the right level of pay is a difficult act – paying too much is not financially viable and paying too little makes employee retention hard. However by an open system, it gives the company and each individual confidence that each role will pay according to the market. Obviously, even people who have the same job title do not have the same duties so a good pay scale should indicate the remuneration strategy including the criteria which variable pay decisions are based on, as well how the pay structures keep pace with market.

 

The major benefit of pay transparency is lowering pay discrimination. One major problem which is hindering the move towards equality, is that for many lower paid workers, they are not even aware that their counterparts have a different salary. Without this key knowledge, they are not even open to the opportunity to resolve the issue. By benchmarks being presented, it gives them open access to evidence to support asking for raises to level them with others.  However, as always, a system like this comes with its downfalls.  If employees are paid less than other employees or could be paid more in their bracket, and it is known, and strong reasons cannot be given to justify their current salary, then it can lead to disgruntled individuals, ultimately leading to higher employee turnover.

 

With the gender pay gap still at high and more concerning, static rates, widespread pay transparency may help us move towards equality. But it is not just the sexes that will benefit. Wage discrimination affects races, ages and ethnicity. While legislation exists to ban it, perhaps it takes publicly available information regarding each skill groups worth to remove any discrimination or unconsciousness when awarding salaries.

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