Academic calls for greater acknowledgement of pay equity
Discussing salaries has long been taboo in many workplaces but a leading academic told HRD organisations need to be more open about how much everyone is being paid.
Bradley Distinguished Professor at the University of South Australia, Carol Kulik, believes without transparency, pay systems become susceptible to systemic inequities.
“It’s important to have some degree [of transparency] so organisations can keep track of inequities that get built up over time,” she said. “Every time you're offering somebody a salary, you're basing it on your impression of what the market is or what you've done before," she said.
“There’s this interesting quirk that if we don’t know what other people’s salaries are, we usually assume we’re underpaid. That’s kind of our default."
Kulik, who has been advocating for greater pay transparency for many years, says discussions about pay equity has become more prevalent at work.
“Certainly, in a lot of different national contexts as well as state and regional areas, we’re seeing more regulated pay transparency. In the US, there are some states that require salary bands to be put on job ads,” she told HRD.
Locally, she pointed to a significant shift: “Here in Australia, the big thing has been releasing gender pay gap data, starting last year with private sector employees, but now this year, with public sector as well.”
These developments offer employees clearer expectations around negotiable pay – a change that could also benefit recruitment and retention strategies.
For HR leaders, transparency isn’t just about engagement – it’s essential for equity.
Yet Kulik cautions that pay advice often remains gender biased. “You wouldn’t take a job without discussing it with trusted friends and advisors. If women are asked, their closest friends are likely to be other women – they’re going to be biased in what the right salary is.”
“If you're always asking people who are at the low end of gender pay gaps, you're going to start to think that that's what salaries are,” she added.
“We hear that story a lot of times from executive women who say they had no idea how much they were underpaid until they got appointed to the compensation committee and actually saw what the range is.”
Kulik said that people tend to have information only about their own pay and see raises as generally fair because it’s an increase on the year prior – but doesn’t look at wider issues around what pay is fair and what isn’t.
While greater openness is welcomed, Kulik highlighted the potential pitfalls if not managed carefully, described them as “unintended negative consequences.”
“If you're an organization in an industry that always has big gender pay gaps, looking around and seeing that your competitors have gaps that are just as big as yours, or maybe even bigger, I think that can be really demotivating to do anything about it,” Kulik warned.
“You no longer have any incentive to make it better, and that's why I think it's so important to celebrate the organizations that do make progress to demonstrate that people really care about this, and you know they are paying attention when you do the right thing.”
It was also noted that when salary offers are being monitored internally, managers can become cautious and conservative – which will narrow the gender pay gap, potentially, but also means workers could “lose some motivating potential.”
“Sometimes a high salary is appropriate, sometimes you have somebody who's a high performer. You don't want managers to become so cautious that they never offer anybody a high salary.”
