One result from behavioral economics is that people care more about their relative standing to others than the absolute value of the salary. This is why transp

One result from behavioral economics is that people care more about their relative standing to others than the absolute value of the salary. This is why transparency can be a double edged sword. If I think I deserve to be paid more than Joe, as long as I don't actually know how much he's paid I can believe that I'm being paid more. However, once you have transparency and I can see Joe is getting paid more than myself this will probably have a negative impact on my morale and performance. One example I've heard discussed (I think by Dan Arieli) is how transparency in CEO pay has failed to bring CEO salaries down. One problem is now CEOs can see what other CEOs are getting paid and naturally every CEO will want to be paid higher than his peers. I used to think open salaries would be a good thing but lately I'm not so sure. You definitely want to tread very carefully there as there are many implications and unexpected consequences.