Back in the 90’s when I entered the workforce it was frowned upon to talk about your pay. Compensation was a private matter, and very little was shared about the practices in place. Figuring out how your pay level was determined was like doing a puzzle wearing smudged glasses.
Fast forward a couple of decades to today. Now, people expect to know the pay range for a job when they apply and how they can get a pay increase once hired.
According to a 2022 survey from workplace analytics software company Visier, 79% of employees want some form of salary transparency, and 68% would switch to an employer with better transparency, even if their own salary didn’t change.
What Does Salary Transparency Mean?
Salary transparency, also known as pay transparency, refers to the practice of openly sharing information about compensation with employees and job candidates. The question is: Just how openly do you share?
To help identify where organizations are at regarding transparency, PayScale created a model that includes five levels of salary transparency as illustrated below.
Regardless of which level your company is at, it’s important to realize where you are on this spectrum and what message it sends to employees.
4 Steps for Better Salary Transparency
- Figure out what salary transparency looks like for your company, and where you want to be. Consider alignment of other policies and practices to have a consistent approach.
- Conduct a pay analysis to identify discrepancies. This may surface pay equity issues or other differences; take time to address any misalignment in pay levels.
- Use objective data to determine salaries. This helps to eliminate bias and create a less subjective pay structure, and typically involves using validated survey data.
- Communicate and educate managers and employees on compensation practices which inform pay decisions, including the level of pay transparency the company adopts.
In my experience, greater salary transparency leads to greater trust and engagement. It wipes the smudges off those glasses and shows how all the puzzle pieces fit together, creating clarity about pay.