While making dinner with a group of people at my house last weekend, the topic turned to a friend’s new job offer.
“I think I’m going to take it,” he said.
“Must feel good to be getting back to work,” another friend replied. “How much are they paying you?”
“Forty-five thousand. Good benefits.”
In prior generations, the list of topics generally agreed upon as taboo stood at three: money, politics and religion. I never knew what my father made, and I suspect he had little knowledge of what our family friends actually made.
Perhaps it is the rise of social media, or the result of our recent economic downturn, but people are talking. My friend did not feel weird answering how much he would be making, and nobody in the room felt uncomfortable with the question. In a world where Facebook, Twitter, and other social media allow us to know not only the exact time a friend worked out at the gym, but with whom and on what, it seems income has become just another topic to be shared.
These new relaxed boundaries have entered into the workplace, where discussions about salary among employees have increased. As net-gen companies tout informal dress, opened-up office spaces, and post-work company events, co-workers are encouraged to build relationships beyond their shared work. While these activities all create a friendlier, more cohesive workplace, they also create an environment where people are comfortable talking about more of their life, including their salary.
There is a laundry list of reasons employers do not want their employees speaking about salary, ranging from intangibles like morale (“I can’t believe I make $30,000 less than that guy”) to extremely tangible litigation (“I can’t believe the two women are paid $20,000 less than the two men in the same job). Many times, the effect of employees discussing salary is hard to control. It is one thing for an employee to compare his or her salary to what they think is the correct match on the Internet or to what a friend makes, but the effect is greater when the comparison is to the worker in the cubicle right next door. It may not be an appropriate comparison (“Our titles both say Coordinator”), and it may even be a baseless idea (“There’s no way some person in marketing should make the same as me!”), but piecemeal information traded between employees encourages imperfect assumptions.
Whether the employees themselves gain value by engaging in these conversations is irrelevant. What matters is that they are taking place, and employees will form their own thoughts about their company’s pay decisions if they are not supplied with correct information.
Since attempting to silence employee speech on the matter is both inadvisable and illegal, the best way to be worry-free is to take a thoughtful approach to managing pay:
- Have a clear pay philosophy – know your market, budget, and organizational needs. Use these factors to consider how an organization-wide approach to compensation would look
- Ensure internal equity in pay decisions – develop a comprehensive base pay plan that values jobs at your organization and prevents the unintentional inequity that comes from ad-hoc hiring and pay increase decisions
- Broadcast the right message – control the conversation by clearly communicating how pay decisions have been made. Be upfront about your organization’s pay during the recruiting process.
Promoting a thoroughly-planned, equitable and well-communicated compensation program can remove the downside of employees talking amongst themselves, and might even put you at ease when sending out the invitation to your company’s next ‘Casino Royale’ or ‘Tapas Night.’
– Alexander Shogan, Senior Research Associate
CompTalk 