Is pay transparency good for business?

by Miklos Bolza29 Aug 2016
Pay transparency has long been a contentious issue with arguments to be made on both sides. We talked to three HR experts about this to see if employees should know what others are paid.
 
Transparency is definitely good for business, said Shanyn Payne, general manager of HR at Swinburne Online.
 
“One of our remuneration principles is to be transparent about pay without breaching individual confidentiality. While we haven’t taken the controversial step of publishing everyone’s salary on the intranet, we’re open about how our employee’s salaries are benchmarked.”
 
Amanda Jackson, general manager of HR at LG Electronics Australia says that employees should have the opportunity to determine where they sit within their peer group remuneration bracket.
 
“We also believe that we have a duty to our staff to be transparent with processes and factors determining salary review outcomes.”
 
However, she added that individual pay should remain confidential.
 
“Ultimately, we believe it is crucial to respect privacy and confidentiality in our workplace, and while we endorse pay transparency, sharing individual packages is where we draw the line.”
 
One way to achieve transparency is through mechanisms such as a strong job architecture, said Hamish Deery, head of talent and rewards at Willis Towers Watson.
 
“Best-in-class organisations share their remuneration strategy with employees, including their total rewards philosophy, how pay structures keep pace with the market, and the criteria against which variable pay decisions are made.”
 
Employers may also choose to communicate where each worker’s pay falls within a range or relative to a market benchmark, he said.
 
“We find these factors are just as important to the employee experience of pay equity as the absolute pay level – sometimes even more so.”
 
Related stories:
 
Pay and display: Would you make salaries company-wide knowledge?
 
Total transparency as an engagement tool
 
Why pay transparency is good for business

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