3 ms·

Not entirely the same situation, but when companies have full salary transparency (i.e. the salaries of all are known to all), then there will be fewer outliers

by lucumo 4y ago

Not entirely the same situation, but when companies have full salary transparency (i.e. the salaries of all are known to all), then there will be fewer outliers. So, there are fewer "underpaid" people, but also fewer "overpaid" people. I put those terms in scare-quotes because it's unknown whether or not those differences were deserved or not. I did have a source for that, but it was in a podcast and I can't remember which. (1) The assumed mechanism made sense to me though: companies/managers would need to be able to justify salaries to anyone, which is much harder for outliers than for an average salary. It could be detrimental to company peace to hire somebody who earns 50% over everybody else, even if they are worth it. It changed my mind a bit on whether I like transparency. I used to like it unconditionally, but now I'm not so sure. At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. (1) One of the weird things about listening to podcasts is I sometimes remember my physical location when hearing something better than the actual source of the information. That's also what happened here. I remember the traffic light I was stopped at, but not the podcast.

nequo 4y ago
> I did have a source for that, but it was in a podcast and I can't remember which. Was it maybe on the What is Wrong with Hiring podcast?[1] > At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. We can also reasonably expect an opposite effect. Salary secrecy could push down the pay of even high-productivity workers. Searching for a new job is costly, both in terms of time and stress. If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. This means that you are less likely to collect outside options that your employer would need to match by giving you a raise. [1] https://www.whatiswrongwithhiring.com/ https://www.whatiswrongwithhiring.com/
- lucumo 4y ago
  > Was it maybe on the What is Wrong with Hiring podcast? No, I haven't heard of that one before now. I looked again, but can't find the one I listened to. Side note: pay transparency is an economy podcaster's wet dream. There are soooo many podcasts about it. > If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. The thing is: that is something you can influence. It's not a popular opinion, but employees do have some amount of agency when it comes to compensation. You can learn about salaries of others, even when it's not fully public. You can study negotiation. You can hop jobs every few years to get a raise. None of that is a job skill (though being high-agency is...), but they are things you can do to get more than average. Just getting the average OTOH, does not give you any agency in your salary. It's just been decided by circumstances outside your control. (1) And it gives an employer the greatest excuse ever to not go higher: "this is what everybody else is making." . The downside of explaining "the other side" is that it makes you look like you're against something. I'm not. I'm just not in favour without reservations. But so much is already written in favour of pay transparency, that it adds nothing to regurgitate those arguments. Any economy podcaster will have several podcasts about the pros. (1) I've been part of collective bargaining, and this complete disempowerment annoyed me. Instead of the employer and me hashing something out, it's become the union and the employer deciding for me. It felt like mommy and daddy discussing my allowance.

by lucumo 4y ago

nequo 4y ago

> I did have a source for that, but it was in a podcast and I can't remember which. Was it maybe on the What is Wrong with Hiring podcast?[1] > At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. We can also reasonably expect an opposite effect. Salary secrecy could push down the pay of even high-productivity workers. Searching for a new job is costly, both in terms of time and stress. If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. This means that you are less likely to collect outside options that your employer would need to match by giving you a raise. [1] https://www.whatiswrongwithhiring.com/ https://www.whatiswrongwithhiring.com/

lucumo 4y ago
> Was it maybe on the What is Wrong with Hiring podcast? No, I haven't heard of that one before now. I looked again, but can't find the one I listened to. Side note: pay transparency is an economy podcaster's wet dream. There are soooo many podcasts about it. > If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. The thing is: that is something you can influence. It's not a popular opinion, but employees do have some amount of agency when it comes to compensation. You can learn about salaries of others, even when it's not fully public. You can study negotiation. You can hop jobs every few years to get a raise. None of that is a job skill (though being high-agency is...), but they are things you can do to get more than average. Just getting the average OTOH, does not give you any agency in your salary. It's just been decided by circumstances outside your control. (1) And it gives an employer the greatest excuse ever to not go higher: "this is what everybody else is making." . The downside of explaining "the other side" is that it makes you look like you're against something. I'm not. I'm just not in favour without reservations. But so much is already written in favour of pay transparency, that it adds nothing to regurgitate those arguments. Any economy podcaster will have several podcasts about the pros. (1) I've been part of collective bargaining, and this complete disempowerment annoyed me. Instead of the employer and me hashing something out, it's become the union and the employer deciding for me. It felt like mommy and daddy discussing my allowance.