Sharing Salary with Co-Workers:
There has been a lot written lately regarding discussing your pay with co-workers as part of a broader movement toward pay transparency. There are three main arguments generally proposed in favor of talking to co-workers about pay.
1) Pay discrepancy – there is still a lot of worker pay inequality and discrimination.
2) Knowledge equals power – it levels the playing field in salary negotiations
3) People should advocate for their pay.
These are valid goals, but I believe the question is the wrong one. In fact, talking to co-workers about pay does not address these issues and can create significant risks for you, your employer and the co-workers you speak with. I propose that the right question is how to increase transparency to achieve the above goals and to ensure you are properly compensated.
People should to be paid what they are worth – period. There is still a lot of pay discrimination and inequality. But, there is also more information about pay readily available than there has ever been without the inherent risks in discussing pay with your co-workers.
Pay transparency vs. talking to co-workers can be an important part of that. In our own practice, I advise most of our law firm clients, depending on their culture, to be relatively transparent with regard to compensation in terms of a finite range, which in the legal field, is often based on certain metrics that are objective. Subjective factors for compensation usually determine where someone falls within that range. Firms who have opened up and become more transparent have also created a lot of work for their management. Especially in the transition to increased transparency, there can be chaos and a large number of conversations with employees as well as hard feelings. But it creates a more trusting, open environment and a work culture where people know what is expected, how they should perform, and what they should focus on to achieve their goals. It helps employers align corporate goals with people’s individual goals. It helps employees understand how they and their role fit into the organization and how they can impact their compensation. In a corporate environment, I believe that a flat corporate structure where you collaborate with your manager to achieve your personal goals and the firms goals is the ideal. Pay transparency and the goals and results of a well-executed pay strategy are laudable objectives to work toward.
Ultimately, the advice to talk to your co-workers is so that you can take that information to your manger or boss who can actually affect your pay. My advice: leave out your co-worker who cannot affect your pay. Encouraging people to talk about pay and to advocate for themselves is a great idea. The question is with whom and how to best impact your pay? How to ensure you are getting market value and who you should approach about that.
Here are some risks of talking to a co-worker about their pay:
1) They cannot affect your compensation.
2) You learn what THEY are worth in their role to your employer – not what you are worth.
3) Some people don’t want to talk about their pay- you may offend; companies sometimes have a policy against it.
4) It is not enough data-you don’t know their full background, if they were hired in a great or terrible economy, if there are specific things they’ve been asked to do, etc.
5) People are not always totally forthcoming - we have had people give us pay with the value of benefits and an anticipated raise or anticipated bonus factored. They may not wish to admit where they stand.
See full interview here on Channel 7 News Denver