No one likes to feel like they’re second fiddle…especially at the thing they spend most of their time doing: work. You might think you can avoid the possibility of making your employees feel this way by forbidding them from talking about their salary…but, well, first, that’s illegal—discussing wages and working conditions is an employee’s right under the National Labor Relations Act—and second, it gets you nowhere. Insisting that workers refrain from discussing salary only kindles distrust; people will talk regardless of the rules. Instead, try an even simpler solution: be transparent.
Recent studies from both Cornell University and Tel Aviv University suggest that employees cooperate better when salary information is freely available. Having the earning hierarchy exposed helps everyone know who the experts are and where to seek help. What’s more, transparent money talk motivates employees to work harder. At least that’s what the research says.
Experiments with complete transparency have delivered compelling results…but it’s not a strategy for all workplaces. Company size and structure are determinative factors. So too is simple maturity. If “Kevin” learns that “Daniel” has been receiving larger salary increases, he might take it personally and complain of being assessed unfairly. Not all employees are capable of calm rationalization. Instead of understanding that varying experience and skill play a role, some may feel simple jealousy and allow resentment to build.
Only you know your employees well enough to determine whether they would benefit from radical transparency. If you have your doubts, you might try an intermediate approach: open, frank discussion. Talking points might include:
• Salary range
• Maximum earning potential for a given position
• Explanation of criteria for upward movement
• Insight into how a promotion might be gained
In most cases, employees simply want to feel as if they are being fairly remunerated for their effort. Given that they will compare salary regardless of company policy, your best bet is to provide them the information needed to understand why they earn what they do. As with all things, this is easier said than done. For a conversation that addresses your individual needs, consider scheduling a free 30-minute discovery session with our founder, Molly McGrath. Even small tweaks to your company’s culture can pay great dividends. The sooner you start, the quicker those dividends will arrive!