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Sep 9, 2014

In a few weeks, I am going to talk with a local compensation association about pay transparency.

As I’ve been writing over the last few months, I think there’s a cultural shift underway, with pressure building from various angles to “out” employee pay.

It’s natural that employers in Silicon Valley are feeling the most pressure. Many of its company cultures strive to live up to open communications standards like “don’t be evil.” The rest scramble to lure talent away from these companies, even though their own devotion to core values is not as obvious to employees.

A lack of risk taking in talking about pay

I’m stating the obvious when I point out that most company’s efforts at compensation communications have fallen under the motto that Dan Walter talked about in his recent Compensation Cafe article, First, Do No Harm. In spite of how doctors deliver on their oath, our own interpretation has often been, better to do nothing or nothing much, rather than take a risk when it comes to speaking openly about pay.

Our prognosis for current employees seems to be no more complex than: They’re lucky to have a job. And, for some reason, using a risk management strategy for compensation communication has rarely been palatable to us, even as research accumulates that the ROI for effective communication can be clearly measured in the bottom line.

Look where that leaves us.

What if your company wanted to follow Brent Rasmussen‘s advice from Harvard Business Review for improving recruiting practices?

Include salaries in your job descriptions (of job openings) to attract more candidates . . . if you make the salary known, you’ll gain a leg up over your competitors who don’t. Transparency can be a huge advantage — especially if your company is offering compensation packages at or above the market rate. Job seekers are more likely to apply when they see a salary range listed. The disclosure also signals that your company is forthright and willing to engage in dialogue.”

Things are changing

I can hear the “yikes!” now and you’d be right. How could you possibly start posting salaries with job openings again when current employees:

  • A) Don’t know their own salary ranges;
  • B) Will be paid less than the new hire and/or;
  • C) May feel stymied anyway because of negligible increases for many years.

And yet, things are changing. The time is coming when you’ll do more harm by not communicating well and openly. At this point, there’s no perfect place to start. You’ll have to invest the thought, time and money in strategy not just Qs and As.

Take the recruiting example above as an example. To implement it in a way that improved the overall health of, and avoided doing harm to, your organization, you’d have to identify everything and everyone that would be affected by posting salaries on job offers, understand every intervention that would be needed, and be prepared to fix the compensation system not just the recruiting practices.

Better to start breaking bad habits now

Like any other bad habit you want to break, you’ll have a better shot at long-term wellness if you start now. Even if you avoid real illness, things are just going to get more and more unhealthy if you don’t practice better communication habits.

On the plus side, working on compensation communication will show your fitness to take thoughtful risks that pay off. Resolve to do no harm, do the tough work that implies, and your innovations will have real meaning for your company and your career.

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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