Pay Secrets, or Why Don’t We Post the Salary Structure on the Office Wall?

Sep 19, 2013

To what extent is your compensation program transparent to employees, or on the other hand, how much is kept a big secret?

Early in my career I worked for a very successful, decades-old manufacturing company who maintained the practice of posting their salary structures on the walls next to the punch clock machines. Every grade and salary range up to management positions was available for public viewing.

I was young and unseasoned, hadn’t been around much yet, so didn’t think much of the practice at the time — either way. It was just the way things were at that company.

Those were the days

Flash forward to today. In your organization, if an employee asks about the salary range of a job other than their own, do you tell them? If an employee asks the grade designation of a job not their own, do you provide it?

Or do you say that it’s none of their business, that such information is on a need-to-know basis?

As my professional career progressed from those early days, it often seemed that the disclosure practices of my employers slipped backward into the era of “we – they” management philosophies, an era I had thought long gone.

In one company the employee wouldn’t even be told the minimum and maximum of their own salary range. Another employer would readily tell an employee their own salary range, but not the range of a job one grade higher.

Now of course, it’s entirely possible that my own career progression of employers is a unique combination of companies not typically replicated by many of you out there. Perhaps most of you still post your salary ranges on the break room wall, or the pay grades are simply included within the periodic employer newsletters.

But I’m betting that’s not the case.

What’s the big secret, anyway?

So why is that? Why not disclose the key elements of your job evaluation and base salary structure? What’s the harm in letting employees know where they stand, and what their career progression could look like?

What’s the harm? What’s the big secret?

Whenever I asked that question, in all innocence and with a guileless question mark on my face, the usual answer was, “that’s the policy. Always been that way.

Dumb answer. But, pushing my query further never did get me a decent explanation, which left me with the obvious conclusion that management felt they would be better off if such information was hidden from their employees.

Perhaps it was some form of management discretion that they felt would be challenged by letting too many people know what was going on, but the tactic never did make sense to me, as folks are even more curious about that which they’re told they can’t see.

Hiding the crown jewels

If a company is going to restrict information about their pay programs, it’s common to guard two key elements:

  • Salary range — Communicating the minimum and maximum, or even just the midpoint. Letting you know how much you’re paid in relation to how the company has valued your job.
  • Grade — The designation of a position within the hierarchy. If you know your pay grade, chances are you can figure (or guess) the grade of others – including perhaps your boss.

Then again, if the grading structure can be manipulated by management discretion (whimsy), or job evaluations slanted one way or another, perhaps there are a few skeletons in the closet after all. Perhaps there are indeed little secrets that are best kept out of sight.

If not, then why not post the salary structure on the office wall — all the grades, all the salary ranges, and all the jobs covered by the compensation program? For those who like to keep their confidentiality, you can cut off the disclosure at the executive level.

If you have nothing to hide …

But that would be heresy in many quarters, wouldn’t it? Because if those jobs have been fairly and objectively evaluated and priced against both internal and external factors, what’s the reason for the locked drawer attitude?

If there’s nothing to hide, if you can defend or at least explain your decisions, then why not hang your laundry out in the sun?

What’s the big secret?

I think we know.

This was originally published at the Compensation Café blog, where you can find a daily dose of caffeinated conversation on everything compensation.

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