by Lua Leggett

Pay transparency

Salary stories are intrusive. Do you ask your neighbour what they earn for their job?

Nicole Kidman

We should not confuse transparency with the idea that every person in the company knows what every other person is earning. Pay transparency means that every employee should understand the rationale of their company’s overall pay and compensation, how they themselves fit into the scheme and how their pay stacks up relative to other options. Compensation is no longer a hush hush secret and access to information on the internet has provided unparalleled levels of information on pay and reward for specific jobs and roles across all sectors.

Organisations vary dramatically in their attitudes and approaches to pay transparency. Some will publish their pay scales and the criteria for progression openly on intranet sites, websites, forum discussions or within the public domain. Others will hold this information closely within the senior management and HR departments and only permit sight in exceptional circumstances. Ensure that you understand your own organisation’s approach.

How you deal with transparency will therefore be driven to a great degree by your own company’s culture. However, one thing to bear in mind is that you cannot ‘gag’ people. The coffee machine syndrome is strongly in play in most organisations, so you can be pretty sure that within a short space of time most members of your team will have a good idea of who has had a pay increase, where they stand comparably and who did or did not get a bonus!

Handling a challenge in these circumstances requires a degree of diplomacy. You cannot be seen to discuss any individual’s pay or reward with another - it would be at best unfair and at worst could land you with disciplinary action. However, you cannot lie or be seen to be hiding anything either.

The best response to pay transparency is to adhere to your organisation’s cultural message and ensure that your own team understands the rationale behind growth, progression and performance-led reward. When challenged by a member of your team regarding transparency, revert to the plan outlined in Handling pay conversations with your people. Set aside time and an appropriate venue and follow the steps described. Remember, never, be drawn into a discussion off the cuff.