There is an interesting article that Alexander Kjerulf writes about why secret salaries are a bad idea. His main argument is that it will create an environment where unfairness cannot be addressed directly. He suggests data of salaries in a company should be open:
I believe on a very fundamental level that openness is better than secrecy, in life and in business. I’m not naïve enough to share all information all the time, but my chosen approach is “Let’s make everything open by default and only make those things secret that absolutely need to be”. Would I share my list of prospective clients with my competitors? Nah. Would I share it inside the company? Heck, yeah!
The article attracts some good comments on people of supporting different side of the fence, with some real world examples:
A few years ago, we had a local drought in the market for certain positions. As a result, we had to lure employees to relocate. The only way to do that was to offer relatively higher salaries than the norm. Not much more, but noticable.
Since then, the drought has ended. Now we are able to hire equal employees at more reasonable salaries.
So we are in a position where we have several employees who are, in effect, overpaid, due to market conditions. We also have many more equally talented employees who are paid several thousand dollars less.
It is practically impossible to ask employees to accept lower salaries, and we wouldn’t presume to. Those contracts were hammered out at the going rate, and we’ll honor them.
In an open salary system, the only “acceptable” solution would be to raise everyone’s salary to the same over-priced level.
There are for and against open salaries – which one makes more sense to you?
Why secret salaries are a baaaaaad idea – [The Chief Happiness Officer]