HRGuru

The more transparent salaries are, the more accurately an employee can assess his or her value to a company. You'd think that companies benefit from secret salaries and that's why they keep them secret, but really, if salaries were 100% accurate—perfectly pegged at the employee's worth to the company—then the company would have no problem revealing all salaries. The only people who benefit from secret salaries is the human resources department. If they make an error, they can hide it.

We just had a meeting regarding the discussion of others' salary within our company. We are a small company of 22 employees, and our CEO just made the statement that it is "completely and utterly taboo to discuss the finances of the company or of co-workers". No kidding, we had this meeting about 2 hours ago. They are of the old school where no-one discusses another's salary.

Personally, I like the idea, and was close to sharing the idea in the meeting, but didn't because of his strong opinion on the matter. He's the boss! I just work here!

In an ideal world, or company, I believe in an "open kimono" style of management and management communication where only truly secret or private matters have to be held secret or private; and those things do exist.

When it comes to compensation, unless a company has a well thought out communication program, a comprehensive compensation and rewards program, linked to tight performance metrics that are properly followed by experienced management, then just publishing salaries will likely be the wrong thing.  It will lead to lower production and profit by engendering dissatisfied workers who can't make heads or tails of why anyone is being paid what they are being paid.   One's worth is a very touchy subject and even when all the aforementioned things are in perfect alignment, it takes skillfull communication by people who have had experience in helping people understand their worth in the organization.  

Salary grades and bands can help keep individual salary points somewhat private.  But bands and grades need explanation as well.   You're moving into the realm of having an experienced and licensed comp professional or a very experienced generalist who has a talent in comp management to create a fully integrated system.  Remember, to justify why a position (not a person) is worth a certain amount brings into play the issues of comparable pay for comparable jobs and the newly rising under Obama's campaign pledge, the issue of comparable worth of different jobs.  

Without a fully integrated system, which can be easily built in a small company that has open minded executives, you can protect the company and the execs from discrimination suits and bring fairness and balance to the workforce.  Done properly it can be very liberating and can be an enducement to performance. 

One's salary is never really a secret, mainly because people do talk.   Be careful with your policy on not talking, check your state/province laws to make sure it is legal.  In California for example, it is not permissable to discipline, in any way, two employees who are talking about their own wages.  If they talk about a 3rd person's wages, then it is something you can take action on.

If it's a publicly traded company, many executives wages are disclosed in the published tax returns and/or stockholders' statements and are therefore public record.  It can be hard to try and "prosecute" someone for keeping confidential what the company has already made public. 

I think salaries should be kept for the most part, private. Interesting, I think most people think that their value to a company is defined by the money they are paid? But in reality initial salaries are indicative of the value of the position not the person. Personally I would like to see salary ranges/bands printed and made available to salaried Ee's but I agree with SirFrey on the necessity of explaining it. Man o' man have we had problems with this one! Worst situation yet, Even the VP was trying to find out what the Sales Manager was making after he got a raise. He wanted to make sure he was making more-wow! (not told BTW)

There is one thought for transparency:  I was working in a company that was suspected of racial discrimination.  Because a black employee and I disclosed to one another our salaries, we had something that they could actually take to the NAACP, Civil Liberties, and a few others, and a lawsuit was discussed with her lawyer.  She was the head of the department, and I was a newly hired underling.  I was making alot more than she was.  Sometimes, disclosure is a good thing.  Needless to say, my white supervisors were not pleased with me, and they tried to fire me.  It was one time when I was successful in fighting back, and I got compensation.  I think when it comes to inequity in the pay scales, you do need to know, or you can't do anything about it.  There are many things about this topic to consider.  In general, I wouldn't consider my salary to be anyone's business, not even my co-worker's.  But there are times when it's something to be looked into.  For instance, if a male co-worker and I were sitting at opposite desks doing the same work, I would be entitled to know that he was making 50% more than I was and had been working for the same length of time.  This would be against the law, and I wouldn't be able to fight for my rights if I didn't know.

I can't say about other places, but in California, two people discussing their own payscales is extremely commonplace.  It is so prevalent that California had to enact a special law that gave that conversation complete protection.  You cannont discipline two or more employees who talk about their OWN salaries/pay.   Example:  If employees A, B, C & D get together and they all share their pay, that is legally protected.  But if they discuss employee Z's pay, that is not protected and could lead to discipline.    The fact that they are already talking about their pay scales just makes another reason why it shouldn't be hidden.

SirFrey says ...

I can't say about other places, but in California, two people discussing their own payscales is extremely commonplace.  It is so prevalent that California had to enact a special law that gave that conversation complete protection.  You cannont discipline two or more employees who talk about their OWN salaries/pay.   Example:  If employees A, B, C & D get together and they all share their pay, that is legally protected.  But if they discuss employee Z's pay, that is not protected and could lead to discipline.    The fact that they are already talking about their pay scales just makes another reason why it shouldn't be hidden.

Exactly.  That's where we were, California, and the managers didn't get away with trying to retaliate because we were just talking about our own salaries, and that's what revealed the prejudice in pay.  That was May Company, which later became May/Robinson's.  I don't know if it's even still in business, they got sued so many times for racism in the workplace.  It was discovered that they were paying their black employees alot less than the white ones, and it didn't make them happy that we had discovered them to still be doing it, even though they had already been in trouble for it.  It's amazing what these companies try to keep the public from knowing, or their employees from knowing.

Probably so.  You can't expect to have good management under such circumstances.  Of course, as you're probably also aware, they got sued for overpricing.  Their profits were excessive.  They got caught marking underpants that they'd only paid 10cents for for more than $5, and then they would have an annual 50% -75% off sale.  Do the math, and they were still making an unbelievable amount of money.  Well, I'm happy to hear that this matter got settled.  Mind you, I think I just took us off topic!