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We are having some discussions amoungst our management team about letting everyone know what eachothers salary is (or at least the ranges). Does anyone have experience or ideas about this proposal?

regas14's picture

Can you help us understand what prompted this idea and what is the goal of sharing this information amongst the team?  I think that once the forums understand more about what you and the team hope to accomplish then we can evaluate the concept from that perspective. 

Thanks,

G.R.

Anandha's picture

ManagerDavid

Good question. I am interested in what people think. Not that my company would allow it. It is a radical idea - especially making the ranges known and so you know where you are within a given band.

Anandha

ManagerDavid's picture

BLUF: The thought is that it could be used as a motivational tool and to stratify within a flat heirarchy.

I fought for the promotion of one of my team members and she deservedly got it. However, the structure is rather flat where I am and there was an undertone of feeling amongst some of the team and members in other teams that, because they were "better" than her, they too should move up.

Our management team discussed this and thought that breaking the position into levels would be a good idea. One of the other managers came from academia where the pay bands were public. She suggested doing the same: put our people into levels and let everyone know the pay-scale. That way there would be some differentiation between team members and there is some extra motivation.

The other thought was to forget about levels and just tell people what they earn and what the scales are for the current heirarchy.

It would be a bit of a change but we think it might be a good thing - or it could backfire badly. Interested in your thoughts.

 

mtietel's picture

My company publishes salary bands, but not individual salaries.  By band I mean: job families are grouped together (e.g., engineer might include software developer, software tester, and configuration management engineer).  Families are then broken into bands by job level (e.g., engineer, senior engineer, lead engineer).

The salary bands for various levels might be engineer: $40k - $70k; senior engineer: $50k - $80k; lead engineer: $60k - $100k.  Note that it's entirely possible for you to get a promotion (or two!) with no increase in pay.

In this system, you know your own salary (duh!) and therefore where you are in the band, but typically don't know the salary of your peers.  Usually, the only times the salary bands are used are:

- there needs to be a "market adjustment" for someone who is grossly underpaid relative to the mid-point of their band and experience (our bands are indexed to the industry norms)

- two people get the same performance rating and one person's salary is in the top third of the band, while the other is in the bottom third.  HR's guidance is to give a higher percentage raise (but lower $ amount) to the person in the lower third - in effect, pushing everyone toward the midpoint of the band over time.

We do it in the interest of transparency in compensation.  The second use is the discussion that most confuses people...

Mark's picture

Most companies don't actually publish bands, but you can figure them out.  And most companies are okay with that.

But individual salaries?  MIND-BOGGLING.  Please don't do it.  Every time I've seen it, it leads to less cohesion...and more dangerously, MANAGERS BEING AFRAID OF REWARDING TOP PERFORMERS.

And keep in mind, there's a difference between folks intuiting the bands and companies publishing them.

Bottom line, from a warrior of these battles: DON'T.

Mark

PS: Ask your fellow leaders of one company they know who does it, explicitly, and what happened because of it.  Bet they can't name one.

goofy's picture

The last time it was done was on CEO pay by the SEC. Survey had found that the average pay difference between CEO and average employee was 9 times - they found it obnoxious and SEC made it mandatory that the CEO compensation be made public. The effect of that is now each CEO knew what the pay of the peer was and started getting to it.

The survey conducted 10 yrs later showed it was about 800 times!

So, depending on what you want to get to... :-)

stephenbooth_uk's picture

 Where I work we have somethign similar to the situation MTIETEL describes.  Jobs are organised into Job Families, every job in a Job Family is paid in the same band, the bands are published. 

Individual salaries are not published, I have never seen any serious suggestion that individual salaries be published.  The nearest I've seen was a suggestion that for each job data be made available to the unions which identified individuals by a numeric code (not their payroll number) and gave their gender and salary.  This was before the job families wre introduced and was to demonstrate that there was no gender pay gap. 

Stephen

--

Skype: stephenbooth_uk  | DiSC: 6137

"Start with the customer and work backwards, not with the tools and work forwards" - James Womack

 

asteriskrntt1's picture

A couple of the banks here have established bands with criteria grids for where someone might fall in the band.  I said might as the hiring manager still makes the final call.  Plus, the bands vary across work function and different divisions of the banks.  For example, a category 11 hire in Private Client Marketing might have a range of $90-120,000, plus the benefit package and vacation capped at 4 weeks.  A category 11 in the capital markets marketing area is $110-140,000 with 5 weeks vacation. 

As all the others said, it just creates disharmony when people openly know everyone else's business. 

jmaala's picture

Knowing individual salaries, even in ranges does not promote motivation. 

Surprising as it may be, some cultures actually are open with individual salaries/increases. What does not come as a surprise is the management angst afterwards with individuals knowing what each other is getting paid and demanding for the same if not more compensation.

TNoxtort's picture

AskMarylin addressed the topic of knowing the salaries of coworkers in her column on Apr 16, 2006. I saved it, and found it today when organizing my Evernote File:
 
I had a heated argument with my supervisor after I learned what my coworkers earn. He said I’d have been better off not knowing. I told him that having this information is in my best interest. Assuming the other people didn’t mind sharing the facts with me, who’s right? —M.S., Chicago, Ill.
 
Most of the time, I think your supervisor will be correct, especially if you learn that others are paid more. One reason is that each pay figure is the result of factors that will not be known to you, so the information will be insufficient an perhaps misleading, resulting in dissatisfaction. Another reason is that, unless you are unusually wise, you will use the information in a way that will harm your standing at work, rather than enhance it. If you complain and get nowhere, that’s not in your favor. Even if a complaint results in more pay, it’s not in your best interest for your employer to believe you’re overpaid. It’s a rare employee who, upon learning that others make more, is inspired to find that more pay may be possible an quietly sets about improving his or her job performance, preferably in some noticeable ways!