Tech Tackles the Last Taboo ? Talking About Salary

SalariesTechnology has long made it possible for workers to share anonymously how much they are paid on career websites such as Glassdoor.

But now ?radical transparency? when it comes to attaching salaries to names and not just positions is all the rage among employees in Silicon Valley. And for some companies, revealing salaries is seen as a recruiting tool.

The trend ties into some of the idealism underlying the sharing economy, with people crowdsourcing information to help each assess their value in the marketplace and determine if they are being compensated fairly, said Scott Dobroski, a spokesman at Glassdoor. ?And it?s only gaining speed.?

Unions espouse this openness to ensure fair compensation and discourage favoritism, but it has been much less common in private companies ? until now.

Employees are tweeting their salaries using the hashtag #talkpay as a way, they say, to improve pay inequity. Some are working with colleagues on creating internal compensation spreadsheets. A few tech companies have proactively taken pay transparency to the farthest edge by publishing employee salaries by name. They hope that in doing so they will engender more trust and loyalty, particularly from younger workers.

?You can?t have a stock market if no one knows the price of pork bellies,? said Dane Atkinson, chief executive of SumAll, which internally publishes employees? salaries.

Is all this disclosure a good thing?

Overall, yes ? but there are risks in that revealing salary information without context can be damaging to teams and worker morale.

Studies show that employee satisfaction goes up when salaries are public. Disclosure helps remove the mystery of what a job pays or how a good performer is compensated. And, in firms with salary transparency, there are more women applicants for jobs.

But compensation experts say employees and job applicants want to know more than salaries; they want to understand a company?s rationale for its pay structure. ?You need to have deep conversations with people about the number you are putting up on the wall,? said Tim Low, head of marketing at PayScale, who said publishing workers? salaries is ?a bit naive.?

Stephanie Thomas, a research associate at Cornell University, sees companies moving toward ?pay process transparency.?

?What I?m referring to is providing employees with enough information about policies and procedures and how the decisions are made,? she said. For example, some of the factors that may go into pay differences include seniority, unique skills and success delivering on the company?s goals. ?The differences that are legitimate are often not widely known,? she said.

Google recently faced this issue when a former employee, Erica Baker, and others created an internal spreadsheet collecting colleagues? salaries ? and then tweeted about it. She claimed that some people were able to use the information to improve their compensation.

But Laszlo Bock, senior vice president of people operations at Google, has argued that keeping the veil of secrecy over salaries is prudent at a big firm like Google, which has more than 50,000 employees.

Revealing salaries ?doesn?t seem to make anyone happier,? he said at a public event earlier this year. ?People end up focusing too much on the final number rather than what goes into it.?

The experience of SumAll, a social media management company based in New York, may offer a counterpoint to Bock?s.

The 50-person startup is open about salaries and names. As part of the interview process, interviewers even disclose their salaries to job candidates.

Since it began in 2013, the practice has had a leveling effect, said SumAll?s CEO Atkinson. It has reduced the outliers on both ends of the scale: the low salaries, typically held by women and minorities, as well as high ones, from people who negotiated well.

But SumAll has also tweaked its practice. For example, it no longer includes a person?s salary when it sends an email blast to the entire firm introducing a new hire. That had been disruptive, Atkinson said. Now the person?s salary is listed among others on the internal document that anyone can check. And SumAll doesn?t reveal information about severance packages when someone leaves, something employees said should remain private.

Lynn Root, an engineer at Spotify, has gathered tech firm compensation information from government data for, a project she started with her fiance.

But even she worries that the movement toward disclosure can have short-term costs.

?Transparency of salary data, while great for potential recruits, makes me nervous,? she said. ?From the standpoint of nonmanagement, will making more than my co-workers of equal experience punish me in some form? Will making less than my co-workers give me enough reason to ask for more money?

?In the long run, I find it could be beneficial to all,? she added. ?I?m able to see if I am being fairly paid, what to expect if I move within the company or am promoted ? very similar to how local, state and federal government positions are set up.?

Radical transparency is not a panacea that will suddenly level the tech industry?s playing field.

But companies may want to get ahead of this trend and offer more information ? before the employees start publishing it themselves.

(Source: TNS)