Why your co-workers should know your salary

Three office workers, one man standing between two women

Some privately owned companies have begun disclosing detailed information about financial performance — including salary information — to all of their employees.

This is a good thing.

Now, I don’t think this information should be shared publicly — only with employees. And it should be up to the employer to choose whether to disclose, not a matter of law.

But sharing pay and performance reviews would let employees see where everyone stands in management’s eyes and would send a message from the top that the company is being up front and fair.

Here's what one CEO told the Wall Street Journal in a recent story:

"Employees at SumAll, a Manhattan data-analytics company, can click on a shared drive to peruse investor agreements, company financials, performance appraisals, hiring decisions and employee pay, along with each worker's equity and bonuses.

"SumAll Chief Executive Dane Atkinson says the company was launched as an open enterprise. He and his co-founders reasoned that people work more efficiently when freed of doubts about salary, and better understand their individual contribution to the whole group."

U.S. Salary Distribution

Annual household income % who earn this
Less than $10,000 7.8%
$10,000 to $14,999 5.8%
$15,000 to $24,999 11.4%
$25,000 to $34,999 10.6%
$35,000 to $49,999 13.9%
$50,000 to $74,999 18%
$75,000 to $99,999 11.7%
$100,000 to $149,999 12.1%
$150,000 to $199,999 4.4%
$200,000 or more 4.3%
Source: U.S. Census Bureau

Indeed, employees can use this information to guide their own performance.

The highest-paid employees should be the ones who contribute the most to the company’s success.

Those are the people you should emulate.

And if you can see that the person right above you is in line for a promotion, you can step up your game to try to get the next promotion.

Companies benefit when their employees work harder.

Employees benefit by getting a glimpse into their futures.

If you think the more-advanced employees within your company are underpaid, you can start thinking about a future with another company.

If the employer doesn't like that, it can make its compensation more attractive to retain its best talent.

Disclosing pay and performance information also benefits the company by shutting down the company rumor mill.

Office gossip about who makes what, who is getting promoted and who isn't pulling their weight happens everywhere.

Put this information out in the open, and there’s no more unproductive speculation.

What’s more, knowing that the whole company will see it if you receive a poor performance review can motivate you to pursue excellence instead of doing just enough to get by.

That’s a great incentive for companies who want their workers to be as productive as possible.

It’s harder and harder to keep employee pay a secret these days, anyway.

Glassdoor.com makes employee pay data available online by aggregating anonymous, self-reported salaries.

For example, you can see that out of 859 reported salaries, Ernst & Young’s audit staff are paid anywhere from $40,000 to $133,000. A senior consultant might make anywhere from $53,000 to $200,000, according to the site.

But you don’t know what accounts for the vast salary ranges for the same position or whether the numbers are any more accurate than the information in a Wikipedia article.

Isn’t it better to get accurate data from the company itself rather than unverified data from the Internet?

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