7 ms·

IMO salary secrecy is a weird fetish and probably counter productive. If the differences between employee salaries are not economically defensible then they sh

IMO salary secrecy is a weird fetish and probably counter productive. If the differences between employee salaries are not economically defensible then they should not exist. If employees cannot accept the way that their employers have measured their relative value then they should get a different job.

kartan 9y ago
> IMO salary secrecy is a weird fetish and probably counter productive. Hidden salaries are why the job market is so extremely awful and costly. I have heard a million times that it is really hard to hire talent. But still, our approach to the job marketplace is akin to a bidding system, not a market. Imagine that each time that you go to the supermarket you need to negotiate the price of every item. It will be so hard to know where to buy your groceries. And related to that also salary secrecy helps to hide discrimination from view. Again it makes it a hard problem even more difficult (https://hbr.org/2016/07/why-diversity-programs-fail https://hbr.org/2016/07/why-diversity-programs-fail).
- sitkack 9y ago
  Any company that is paying lip service to Diversity and Inclusion (DI in c-level speak) while at the same time requiring or even asking for historical pay is being extremely disingenuous. By using historical salary, they are borrowing, leaning on and embracing someone else's bigotry. Offer the prospect a market wage, not what *ist system has decided they should get paid and you will suddenly see your workforce normalize in DI.
  - cbanek 9y ago
    Google does both of these (paying lip service to diversity and asking for historical pay, even requiring it). I told them I thought this was suspect, and I almost laughed when they made an offer (which was somehow lower than what I was already making and disclosed to them). I'm really interested to see how the whole wage gap DOJ thing goes, and how they will blame the gap on being "data driven".
mattm 9y ago
Completely agree. It's not a perfect analogy but if you look at professional sports, the main driver behind higher salaries was publicizing them. Prior to that, owners could pay some star players much lower than their market value simply because they were bad at negotiating. It's in our interest to have more publicity around salaries.
- maxxxxx 9y ago
  I have heard the same argument was made about about CEO salaries. Once they got published they started rising.
  - Broken_Hippo 9y ago
    Ok, lets look at this another way. Say the average salary for a cashier is X at one store. However, Sally gets paid Y while Harry gets paid Z. Turns out, they have similar qualifacations and background, along with salary history. Both accepted a raise when they took the job at this store, but for whatever reason Sally gets paid more - and has since the beginning. Similar differences are found between other employees. As one of the reforms, the company starts publishing every employees' salary. A few folks, like Harry, are understandably upset. To help remedy this, the company raises the pay of some folks to make things more fair between folks with similar qualifacations, and make company-wide standards for getting paid more. After a while, that average wage, "X", gets higher because folks are getting paid more.
    - maxxxxx 9y ago
      This sounds like a good thing to me.
      - chii 9y ago
        except for the shareholders
        Broken_Hippo 9y ago
giobox 9y ago
I've read before that with "open companies" where they publish all salary data, it can, on occasion, be surprisingly counter productive. I haven't read extensively on the topic, but I believe there are examples of companies who started out making all employee salaries accessible to anyone in the company reverting this division. Famously Steve Jobs ended up doing largely this at Next. At any rate, I think that publishing salaries openly can have its own set of issues, even if on balance I agree it's probably a fairer approach. This is one of those problems that touches on cultural norms though, so what works for one person can offend another. It's not difficult for me to imagine scenarios were certain employees may overvalue their worth, and take a great deal of offence to a perceived slight when viewing their colleague's remuneration. Humans often aren't good at looking at themselves purely as some kind of commodity to be priced by an open market, even if rationally that might make some sense in this context. People can get scared they will look over-paid, or embarrassed about being underpaid, even if neither of these things is true. There's the whole thorny issue of cost of living adjustments if your company operates in more than one location. The frequent debates I've seen on Gitlab's public salary calculator that tries to address cost of living illustrate how hard it is to get that right - you can get some pretty odd results from that thing just moving your zip code 5 miles in some regions. I imagine you're almost never going to convince everyone that the adjustment factor you choose is the right one.
- scarface74 9y ago
  It's not difficult for me to imagine scenarios were certain employees may overvalue their worth, and take a great deal of offence to a perceived slight when viewing their colleague's remuneration. I agree that people may overvalue their worth, but in that case, wouldn't they look for another job that pays them what they are worth? Either they will find the job and get paid their worth or they won't and realize that they are paid what they are worth.
  - s73ver 9y ago
    Not everyone has the luxury to do that. There are many places where there just aren't that many employers, and the person may not be able to move.
cirgue 9y ago
I am paid less than one of my peers who has a masters from a prestigious university. I am cool with this: they have more debt and a larger skill set than me. However, I am thankful that other people in the organization do not see the difference in our salaries, because I would certainly be treated differently by people outside the team. Salary gets used as a proxy for competence: why do you think people stupidly expensive luxury cars as daily drivers?
- tbrownaw 9y ago
  why do you think people stupidly expensive luxury cars as daily drivers? Because life is more enjoyable if your car doesn't make your commute suck more than it absolutely has to?
  - gcb0 9y ago
    alloy wheel and so many other items from performance cars now only bought for aesthetics make rides less smooth but people with your rationalization never skips on them.
    - walshemj 9y ago
      that's the point of a performance car not to feel like you driving a sluggish sofa
- phamilton 9y ago
  I'm fascinated by how cashflow (student loans, mortgage, family, etc) affects compensation. Given two equally skilled individuals (including ability to negotiate) but one has a bigger mortgage,y hypothesis is the the one with the bigger mortgage will get paid more. I believe cashflow requirements make negotiating easier (provided there is room for negotiation). I'm not even going to entertain your offer for $120k. Not because I know my market value is greater than that, but because I cannot meet my financial obligations at that point. Even if I'm a clumsy negotiator, I'll get closer to my max compensation in that situation purely because I have a higher floor.
phamilton 9y ago
This assumes that compensation should be directly tied to value created. In practice, value created is merely the ceiling for compensation. The floor is the best alternative for the employee. People get paid somewhere in between. Neither the floor nor the ceiling can easily be generalized across multiple people.
troels 9y ago
Part of the problem, I suppose, is that it's very hard to figure out what value an employee contributes with. Making salaries transparent is perhaps rational, but it only gets you that far. If the other half was a solved issue, I don't think there would be much in the way of making salaries open, but as it stands, doing so just makes it painfully clear how broken our ability to measure worth is.

kartan 9y ago

> IMO salary secrecy is a weird fetish and probably counter productive. Hidden salaries are why the job market is so extremely awful and costly. I have heard a million times that it is really hard to hire talent. But still, our approach to the job marketplace is akin to a bidding system, not a market. Imagine that each time that you go to the supermarket you need to negotiate the price of every item. It will be so hard to know where to buy your groceries. And related to that also salary secrecy helps to hide discrimination from view. Again it makes it a hard problem even more difficult (https://hbr.org/2016/07/why-diversity-programs-fail https://hbr.org/2016/07/why-diversity-programs-fail).

sitkack 9y ago
Any company that is paying lip service to Diversity and Inclusion (DI in c-level speak) while at the same time requiring or even asking for historical pay is being extremely disingenuous. By using historical salary, they are borrowing, leaning on and embracing someone else's bigotry. Offer the prospect a market wage, not what *ist system has decided they should get paid and you will suddenly see your workforce normalize in DI.
- cbanek 9y ago
  Google does both of these (paying lip service to diversity and asking for historical pay, even requiring it). I told them I thought this was suspect, and I almost laughed when they made an offer (which was somehow lower than what I was already making and disclosed to them). I'm really interested to see how the whole wage gap DOJ thing goes, and how they will blame the gap on being "data driven".

mattm 9y ago

Completely agree. It's not a perfect analogy but if you look at professional sports, the main driver behind higher salaries was publicizing them. Prior to that, owners could pay some star players much lower than their market value simply because they were bad at negotiating. It's in our interest to have more publicity around salaries.

maxxxxx 9y ago
I have heard the same argument was made about about CEO salaries. Once they got published they started rising.
- Broken_Hippo 9y ago
  Ok, lets look at this another way. Say the average salary for a cashier is X at one store. However, Sally gets paid Y while Harry gets paid Z. Turns out, they have similar qualifacations and background, along with salary history. Both accepted a raise when they took the job at this store, but for whatever reason Sally gets paid more - and has since the beginning. Similar differences are found between other employees. As one of the reforms, the company starts publishing every employees' salary. A few folks, like Harry, are understandably upset. To help remedy this, the company raises the pay of some folks to make things more fair between folks with similar qualifacations, and make company-wide standards for getting paid more. After a while, that average wage, "X", gets higher because folks are getting paid more.
  - maxxxxx 9y ago
    This sounds like a good thing to me.
    - chii 9y ago
      except for the shareholders
      - Broken_Hippo 9y ago

giobox 9y ago

I've read before that with "open companies" where they publish all salary data, it can, on occasion, be surprisingly counter productive. I haven't read extensively on the topic, but I believe there are examples of companies who started out making all employee salaries accessible to anyone in the company reverting this division. Famously Steve Jobs ended up doing largely this at Next. At any rate, I think that publishing salaries openly can have its own set of issues, even if on balance I agree it's probably a fairer approach. This is one of those problems that touches on cultural norms though, so what works for one person can offend another. It's not difficult for me to imagine scenarios were certain employees may overvalue their worth, and take a great deal of offence to a perceived slight when viewing their colleague's remuneration. Humans often aren't good at looking at themselves purely as some kind of commodity to be priced by an open market, even if rationally that might make some sense in this context. People can get scared they will look over-paid, or embarrassed about being underpaid, even if neither of these things is true. There's the whole thorny issue of cost of living adjustments if your company operates in more than one location. The frequent debates I've seen on Gitlab's public salary calculator that tries to address cost of living illustrate how hard it is to get that right - you can get some pretty odd results from that thing just moving your zip code 5 miles in some regions. I imagine you're almost never going to convince everyone that the adjustment factor you choose is the right one.

scarface74 9y ago
It's not difficult for me to imagine scenarios were certain employees may overvalue their worth, and take a great deal of offence to a perceived slight when viewing their colleague's remuneration. I agree that people may overvalue their worth, but in that case, wouldn't they look for another job that pays them what they are worth? Either they will find the job and get paid their worth or they won't and realize that they are paid what they are worth.
- s73ver 9y ago
  Not everyone has the luxury to do that. There are many places where there just aren't that many employers, and the person may not be able to move.

cirgue 9y ago

I am paid less than one of my peers who has a masters from a prestigious university. I am cool with this: they have more debt and a larger skill set than me. However, I am thankful that other people in the organization do not see the difference in our salaries, because I would certainly be treated differently by people outside the team. Salary gets used as a proxy for competence: why do you think people stupidly expensive luxury cars as daily drivers?

tbrownaw 9y ago
why do you think people stupidly expensive luxury cars as daily drivers? Because life is more enjoyable if your car doesn't make your commute suck more than it absolutely has to?
- gcb0 9y ago
  alloy wheel and so many other items from performance cars now only bought for aesthetics make rides less smooth but people with your rationalization never skips on them.
  - walshemj 9y ago
    that's the point of a performance car not to feel like you driving a sluggish sofa
phamilton 9y ago
I'm fascinated by how cashflow (student loans, mortgage, family, etc) affects compensation. Given two equally skilled individuals (including ability to negotiate) but one has a bigger mortgage,y hypothesis is the the one with the bigger mortgage will get paid more. I believe cashflow requirements make negotiating easier (provided there is room for negotiation). I'm not even going to entertain your offer for $120k. Not because I know my market value is greater than that, but because I cannot meet my financial obligations at that point. Even if I'm a clumsy negotiator, I'll get closer to my max compensation in that situation purely because I have a higher floor.

phamilton 9y ago

This assumes that compensation should be directly tied to value created. In practice, value created is merely the ceiling for compensation. The floor is the best alternative for the employee. People get paid somewhere in between. Neither the floor nor the ceiling can easily be generalized across multiple people.

troels 9y ago

Part of the problem, I suppose, is that it's very hard to figure out what value an employee contributes with. Making salaries transparent is perhaps rational, but it only gets you that far. If the other half was a solved issue, I don't think there would be much in the way of making salaries open, but as it stands, doing so just makes it painfully clear how broken our ability to measure worth is.