Why salaries shouldn't be secret

[ksen]

http://www.vox.com/2014/5/15/5719916/why-salaries-shouldnt-be-secret

One of the problems is that virtually everybody in corporate America — from senior management all the way down to entry-level employees — has internalized the primacy of capital over labor. There’s an unspoken assumption that any given person should be paid the minimum amount necessary to prevent that person from leaving. The simplest way to calculate that amount is to simply see what the employee could earn elsewhere, and pay ever so slightly more than that. If a company pays a lot more than the employee could earn elsewhere, then the excess is considered to be wasted, on the grounds that you could get the same employee, performing the same work, for less money.

How is it that most Americans still believe in this way of looking at pay, even as we reach the 100th anniversary of Henry Ford’s efficiency wages? Ford was the first — but by no means the last — businessman to notice that if you pay well above market rates, you get loyal, hard-working employees who rarely leave.

I don't know how you change this mindset. But I think it does need to go because the idea that Capital > Labor has become so powerful that it's now holding the economy back imo.

 

[dismal]

http://www.vox.com/2014/5/15/5719916/why-salaries-shouldnt-be-secret

One of the problems is that virtually everybody in corporate America — from senior management all the way down to entry-level employees — has internalized the primacy of capital over labor. There’s an unspoken assumption that any given person should be paid the minimum amount necessary to prevent that person from leaving. The simplest way to calculate that amount is to simply see what the employee could earn elsewhere, and pay ever so slightly more than that. If a company pays a lot more than the employee could earn elsewhere, then the excess is considered to be wasted, on the grounds that you could get the same employee, performing the same work, for less money.

How is it that most Americans still believe in this way of looking at pay, even as we reach the 100th anniversary of Henry Ford’s efficiency wages? Ford was the first — but by no means the last — businessman to notice that if you pay well above market rates, you get loyal, hard-working employees who rarely leave.

I don't know how you change this mindset. But I think it does need to go because the idea that Capital > Labor has become so powerful that it's now holding the economy back imo.

So, you're advocating a big database with all of our personal compensation information in it that anyone can access, including employers who want to see if they could be paying us less?

 

[Nice Squirrel]

My salary is posted in such a database that anyone can access.

 

[ksen]

So, you're advocating a big database with all of our personal compensation information in it that anyone can access, including employers who want to see if they could be paying us less?

Yes, that's exactly what I'm advocating. You nailed it buddy!

 

[dismal]

So, you're advocating a big database with all of our personal compensation information in it that anyone can access, including employers who want to see if they could be paying us less?

Yes, that's exactly what I'm advocating. You nailed it buddy!

I can see you've given this issue a lot of thought. Good luck with your efforts.

 

[Nice Squirrel]

It does suck when it comes time for salary negotiations. "I see you are taking it up the butt at your current place. How'd you like a drop of lube if you come work here?"

 

[Tom Sawyer]

Aren't most salaries public knowledge anyways? I know they have data along the lines of computer programmers get an average of X dollars in this city and nurses get an average of Y dollars in that city. They can't have that unless the data is already available for them to compare.

 

[Nice Squirrel]

You mean:

www.salary.com

 

[laughing dog]

So, you're advocating a big database with all of our personal compensation information in it that anyone can access, including employers who want to see if they could be paying us less?

Yes, that's exactly what I'm advocating. You nailed it buddy!

I can see you've given this issue a lot of thought. Good luck with your efforts.

It is obvious he has given it more thought than you have with your responses. It is fascinating that any advocate of free markets would be against the very transparency in a market that helps to make it function like a market.

 

[Nice Squirrel]

We can also look up LD's salary...

 

[laughing dog]

We can also look up LD's salary...

You can. But I am paid in kibble not dollars.

 

[Nice Squirrel]

We can also look up LD's salary...

You can. But I am paid in kibble not dollars.

That's some kibble you got's there!

Let me know if you want to adjunct for half pay up here.

 

[Jimmy Higgins]

I think public salaries at a private company can have serious issues. Some people will be pissed about how much other people make, fair or not.

 

[ksen]

That's kind of the point.

With a transparent salary structure it'll be harder for companies to lowball employees while rewarding their favorites.

That's why I hate it when companies ask you what you want to make because I'm sure most people underask for fear of pricing themselves out of the job and companies are quite happy to have that situation in place.

 

[rousseau]

I saw some news story years ago about something of a profit-share company where employees with next to no responsibility were being paid as high as 60k/year, and what happened is exactly what you say: the company was strong with strong workers.

The problem seems to be that if you're going to spend excess money on employees then that money has to come from somewhere else in the business, usually meaning major stakeholders are going to take a hit. When you're a CEO or VP in a large company just a few years in business is going to have your future set, which might not be the case if you distribute wealth more evenly amongst the business. The other side of the problem is that many businesses out there might not have enough excess to implement this type of strategy.

It's a good idea in theory, and I'm sure that in some cases it would actually be the cheaper and more effective solution, but I don't think that's always the case, and I'd imagine that many stake-holders in businesses aren't as concerned about a long term future as they are in leaching money out of it while profit is strong.

 

[Tom Sawyer]

I think public salaries at a private company can have serious issues. Some people will be pissed about how much other people make, fair or not.

That sounds like a good thing. If two people are doing the same job and one of them is getting paid less, he should be able to get a clear explanation of why there's this discrepency. If he can't get one, you're correct that there's a serious issue at that company and it's an issue that should be addresses as quickly as possible.

 

[Trausti]

For public corporations, you can find out the compensation of top management by reviewing their SEC filings. For those lower down or in private corporations, why does it matter? What is this obsession with other people's money? Seems like a cover for envy and jealousy. An employee's compensation is part of the employee's personnel file and this is generally confidential and private. Why would I want others to know what I make? If I desired to, I could tell them. People talk all the time. But that should be my choice, not yours.

 

[Tom Sawyer]

For public corporations, you can find out the compensation of top management by reviewing their SEC filings. For those lower down or in private corporations, why does it matter? What is this obsession with other people's money? Seems like a cover for envy and jealousy. An employee's compensation is part of the employee's personnel file and this is generally confidential and private. Why would I want others to know what I make? If I desired to, I could tell them. People talk all the time. But that should be my choice, not yours.

In order to know if you're being paid a fair value for your work, you need information about how others doing the same work are getting paid. The less data there is available, the easier it is for employers to fuck over their employees.

 

[ksen]

If I desired to, I could tell them. People talk all the time. But that should be my choice, not yours.

And in a lot of companies that can get you fired. I worked for a place that fired a receptionist for discussing her wages with someone else. And everywhere else I've worked there's been a HR policy in place about how talking about salaries/wages is a firable offense.

 

[Togo]

I can generally work it out. There is usually a glass cealing in place somewhere, between those who share the profits of the company, and those who get paid based on their replacement cost.

I'd favour transparent salaries. I honestly can't see why anyone below board or executive level would want to keep their own salary a secret. I can see a motivation for stopping their underlings from comparing salary, but secrecy almost always works in favour of the employer, and against the employed.

About the only situation where it would be a problem is where you were paid significantly more than your team mates.