WhyNot?

Salary Full Disclosure

Category: Employment
Responses: 13 (6 in support, 1 neutral, 6 in opposition)
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It's true that different employees doing exactly the same job are being paid vastly different salaries at many companies today.

Some of this difference is caused because some people are better at salary negotiation when they are being hired, which is not to say they perform any better once the are hired.

Other times the difference relates to when the employee was hired - for example, during the internet boom, I knew of one company where new hires were being offered twice the salary of the existing hires, just to get them in the door. And these people were much less productive, , at least initially, than the existing employees.

Regardless, once you're stuck at a certain pay level, oftentimes the only way to get a significant raise is to go work for someone else.

Companies accommodate this charade by having ridiculously wide salary ranges. At one company I know of, the ranges are typically something like $49,500 to 86,000 for one particular position, skill level and time in grade.

So I propose that legislation be enacted that salary grades be limited to a maximum range of $5000, and a list of all employees and their salary grade must be published once per quarter by each employer. This would shed some sunlight, the best disinfectant, on the current malodorous practice of employee favoritism, and give confidence to all that others are not grabbing an unfair share of the pie.

This idea was originally posted on the forbes.com Why Not? forum.

lokani24, Jan 06 2004

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Although salary is not the entire story as to why one workplace is preferable over another, a published salary range for a particular job qualificaton might do much to rationalize pay levels. And it might do much for cutting down on age, sex and race discrimination on the job.

sand, Jan 19 2004

Terrific idea! I am glad you said to make it a law.

People worry, with good reason, about privacy. However, most public employee's salary ranges are a matter of public record, and they get along ok.

Who would really scream? The private-sector employers; most of them make it a firing offense to disclose your salary to anyone else in the company. Or anyone else, period.

paron, Jan 20 2004

Who would scream? The investors. It would seriously throw the markets into a tizzy.

RayfordSteele, May 12 2004

I agree with this idea but it would be hard to impose on privately held companies, such as the ad agency where I work. I know we have hired people with different salary histories, which has translated into more than a $5000 per year difference. One gal hired for a job was making $25K per year. Our salary was in the 40-50K per year range. Do you think they paid her $40K? Another gal was hired who demanded more than $50K. She was a freelancer and had proven her skills, so they gaver her what she wanted. Seeing a $25K difference for the same job (that is well below 6 figures) seems unlikely, but it does happen.

fontdiva, Dec 01 2004

We tell companies how to organize their pay scale, and we can't force people to disclose their own wages--however, we can have a public interest group do the research and tell us what is the typical salary for a particular line of work in a particular town (I think that employers already have this info).

Raise wages by letting workers know how much their job is worth.

dumllama, Jun 29 2005

I'm posting this for a friend:

There is nothing wrong with being better at negotiation than someone else. People who are better at negotiation are known as “lawyers.” Lawyers’ transactions costs are paid by employers in the form of better terms for these lawyers’ clients. This keeps the lawyers in business, and their clients happy. This is not a bad thing.

Anyway, it is not hard to be good at negotiation so long as you settle on what you or whatever else you are selling, are worth, and just stick to it. People do it on ebay every day, and so can you.

There is no way to define in a law, “one particular position,” or “one skill level.” If you were to pass such a law, you would immediately see a huge proliferation of positions and skill levels. All this would require, in the big corporation, would be yet another employee skilled enough at language to draft fine rhetorical distinctions between Joe’s and James’s “positions” and “skill levels,” and to fill out the forms required by the government to document this. And you would also have a thousand and one lawsuits generated as a result of such a law, with people niggling with ferocious intensity over things that engage their personal sense of self-worth, and therefore make them insanely unreasonable, which no judge will be able to second-guess. This is a prescription for a nightmare.

At a certain point, chips will always fall where they may. Faith in ever more “laws” to “make” people behave in a someone’s ideal of the most ethical way, is often misbegotten and the cause of more trouble than good.

Full disclosure of salaries is something to toy with. However it should not be imposed by law on all. Big money people’s salaries should be fully disclosed--top executives, and all others paid over a certain amount. We do have a scandal in this country of lunatic executive compensation in which the market process is not fair market but a good old boy situation. But people deserve to have their privacy as to salary respected, too, particularly at lower levels of pay. However, a law is not necessary. People’s salaries tend to be known and to leak out. If they do not, this is usually because the employee him or herself does not want it to be known, which is a good indication of their privacy concerns, and this is an individual right and delicacy that must be respected.

New hires being offered at double the salary of existing employees reflects a need particular to a time. It is not outrageous if market conditions have changed and new hires are needed and so are worth big bucks in the opinion of the company then. Existing staff has every right and ability to threaten to quit without obtaining a similar raise. Also, if a company is so eager to hire new people at a high salary, then very likely other companies are too. The employee thus has an excellent opportunity to go to another company for much more money, or else to negotiate a raise where he is. Why should a law be written to retard employees’ impulses to find new jobs? Why should the laws rig the system in favor of employees always staying put, by forcing employers, through force of legal compliance, to give them raises? This is senseless.

Ian Ayres, Oct 06 2005

Professional associations usually establish minimum salary expectations for first-time entrants into the field.

Unions and other collective agreement organizations have pay scales which sometimes work, sometimes they don't.

Your idea has some intrinsic merit, but I doubt if it is practical since wages and salaries are usually privately agreed between the employer and the employee.

R Roffel, Nov 04 2009