Salary transparency seems like a good idea. A study reveals that it has significant drawbacks

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Salary transparency is increasingly widespread in companies. That is, a policy by which companies agree to publish the salary ranges of their different employees, generally by type of work and position, include specific salary information in their job offers and even encourage their professionals to share data about their rewards between them.

The objective of this initiative is to promote equality among workers and show the company’s commitment against discrimination, in addition to being a claim to attract talent and be more honest in the selection processes. Nevertheless, A study A group of several Chinese and Israeli universities points out that, despite its advantages, salary transparency can lead to significant drawbacks for the worker.

Compress the compensation. The researchers explain that the first negative consequence of wage transparency is that it tends to compress wages downwards. The managers of the company, in order not to deal with the foreseeable complaints of people with similar roles, responsibilities and experience who receive different salaries, tend to match them towards the one who receives the least in the medium term.

The authors quote another studio which reached similar conclusions in 2012, although more local, to reinforce the data obtained in its investigation: in 2010 the city of California carried out a salary transparency policy with its employees, which led to the fact that by 2012, in just two years, the average salary in the public administration was reduced by approximately 7%.

Made the law… Another negative consequence would be that salary transparency leads employees and bosses, sometimes, to agree to other types of covert arrangements to obtain more non-monetary benefits than the rest of their colleagues, such as more training or health insurance with greater coverage, which can harm the company environment and would totally undermine the objective of this policy.

Greater individualism. According to the researchers, this tendency to offer more individual benefits to compensate for salary uniformity, added to other formulas to maintain pay differences such as bonuses for performance, may lead professionals to be less likely to work as a team and seek to stand out more than others. others to qualify for these rewards. Which, ultimately, would harm the activity of many companies.

Good policy, but with risks. Despite these disadvantages, the authors of the study emphasize that they consider salary transparency policies to be a good initiative, and that their objective is only to highlight the problems that they may entail precisely so that their objectives are not distorted.

To do this, they consider that those responsible for companies must also be clear about the benefits they offer their employees and explain very well how they are going to measure variable remuneration based on performance. For the latter, they recommend using metrics of objectives and resultsso that the decisions in this regard are fairer and there is no suspicion that the bosses are deciding to award the rewards subjectively and arbitrarily.

Likewise, they advise that this measurement of objectives for bonuses be not only individual, but also collective, in such a way that teamwork is not discouraged.

Image | MartProduction

Salary transparency is increasingly widespread in companies. That is, a policy by which companies agree to publish the salary ranges…

Salary transparency is increasingly widespread in companies. That is, a policy by which companies agree to publish the salary ranges…

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