Transparency. Over the past decade, that word has turned into a juggernaut of sorts. Politicians, businesses, nonprofits, even celebrities espouse the greatness of transparency. In an effort to be more transparent, Twitter accounts were made, blogs and vlogs were established, press releases became a smidge more authentic, and someone started the trend of selfies sans makeup.
It only makes sense that in a field such as personal finance that is marked with trappings of transparency that eventually the call to share salaries would be made. It’s the final frontier in a lot of ways. Bloggers DIY projects, money-saving hacks, couponing tips, no-spend challenge results, monthly budgets, and net worth totals. The missing piece? Income.
I’ve got a secret for you. If you knew my name*, you’d know how much money I make. Not because someone in a similar position reported a guesstimate to Salary.com, but because I am a public servant. As a result, I work under a public contract that contains within it a salary schedule. So not only can I access all of the income of all of my coworkers with the click of a button, I can also pull up my boss’s boss’s salary. Nifty.
I can also look up any additional side hustle money that my coworkers make from lunch duty, coaching, intramurals, clubs, subbing. If I really want to the full scoop, I can use the salary schedule to see how much money they will make every year throughout the duration of our contract. Once that contract is replaced, the information trail starts anew. You name it, I’ve got it.
The second secret? It kind of sucks sometimes. That teacher who works half as hard as I do and has been on the job for fifteen years more than me? Yeah, I know how much money she makes. That teacher who could give me a run for my money in terms of time and money spent on students and who just started last year? Yeah, I know how much he makes, too.
You know that saying about comparison being the thief of joy? It’s not false. Sure, this pay transparency might initially motivate me to work harder. But in my experience, competition fuels nothing but burn out over time. It also takes the focus away from the essence of my job, which is my students. Why put extra energy into comparing myself to other teachers when I could expend that same amount of effort into bettering my students?
Still, the biggest complication to salaries being made public is not what employers or coworkers do with that information. It’s how stakeholders react to that information. We’ve all rubbernecked over a Tweet or a news headline that boasts the salary of some CEO. How dare he? She really has earned it if you think about it. How does she justify it? Well, I suppose he’s worth it.
Now, imagine how every interaction with your stakeholders would feel if your salary was broadcast in the same manner. There would probably be much positivity; it might even lead to a boost in pay if you were deemed to be worth more than what you currently earn. Even if the stakeholder does not have an immediate say in your salary, certainly that commendation would still amount to a feather in your cap.
But what happens when people think otherwise? Once, during parent-teacher conferences, a parent shared my salary with me. Another time, I was in the midst of awkwardly accepting a Christmas gift from a student when another one scoffed and derisively ballparked my salary across the room: “She should be buying us presents.”*** In their minds, I (and probably teachers in general) was not worth what I was being paid. And if I’m being paid by their tax dollars, it is within these stakeholders’ rights to speak out.**
It is possible that I would feel quite differently about salary transparency if I worked in a world where something other than time and advanced degrees could net me a pay bump. Perhaps being a public worker colors my perspective on the issue in different ways than it would for an entrepreneur or a freelancer. I do understand that if salaries were public knowledge, it would theoretically make negotiating for a raise a lot easier. I also understand that it would hopefully amount to fairer practices and less undervaluation. But I’m also not entirely sure full knowledge about everyone’s salaries is as purely liberating as some may think.
*Gasp. However will you cope now that you know Penny Saves is a nom de plume?
**The kid isn’t technically a taxpayer. But if I’ve learned one thing in eight years, it’s how to spot plagiarism. I didn’t hold my breath for a Christmas card from his parents.
***I do buy presents every year. Bookmarks, pencils, and sharpeners. I just hadn’t passed them out yet that day. #awkward
So Tell Me…Should salary transparency be a new standard?
“It is possible that I would feel quite differently about salary transparency if I worked in a world where something other than time and advanced degrees could net me a pay bump.”
That is such an interesting point. I live in a government town, and so a huuuge portion of local employees have their salaries and pay scales listed online for the world to see, as long as you know their “employment code.” It’s easy to be a little jealous of that from my private-sector perch, because I think salary transparency would ease some of my worries about pay inequality, and I can’t imagine that I wouldn’t find out SOMETHING about how I could better position myself for a salary bump.
But.
That’s from the perspective of someone who doesn’t have to live within a really rigid pay structure that relies more on seniority and degrees than it does effort and results. I’ve been lucky that when I work hard, that work has been recognized by great bosses – without needing to go back for an MBA. *Plus* my job-performance stakeholders are almost all internal to the company. I can’t even imagine having students – or parents! – throw my salary in my face.
Thank you for sharing this perspective on the not-so-often discussed aspects of what salary transparency can really mean in practice! It’s clearly a lot easier to say we want it than to live with the good and the bad – and this is a great reminder that there’s clearly a long way to go before a salary situation has *no* bad side, haha.
Sometimes I feel like my posts aren’t complete with your comments, Des. Glad you weighed in with your perspective.
Interesting topic! I’ve seen some companies make salaries public too. I’ve always thought this was a bit weird because it gives people fodder to basically act like jackasses – as you’ve described within your post.
I think that there can be positives in salary transparency, though. For example, companies might be more eager to ensure that their staff is actually paid what they are worth if each staff member knew what their coworkers were making. I admit to being on the receiving end of a higher salary than my coworkers at different times in my career – even though my plate wasn’t as full of work as theirs was. I was better at demanding more money. I played the game better than they did.
But I agree with your sentiments that as a whole, I think public salaries tend to create more resentment than motivation to excel in the workplace. If I knew that my coworker Sam was making more than me, but I was doing more work than him, that sure as hell isn’t going to get me to work harder. In fact, it will most likely have the opposite effect. Why is Sam making more than me? I do more than he does. Screw him, he doesn’t deserve that kind of salary. I’m done with this crap.
…that kind of thing.
You’re definitely right that it should motivate companies to look into fairer payment practices!
I used to be in the defense industry working with a lot of folks in the government and military, you essentially knew what everyone made because it was on the general schedule. Once you knew the rank, years of service, etc. you had a pretty good range.
The thing is, no one really cares that much because it’s been like that forever. I think that if all salaries were made public, it’d be interesting for a few years and then less and less people would care from a comparison perspective. It’d be useful for negotiating your own pay but I bet the hard feelings would subside after a short while.
When you think about the resentment aspect, I believe it only exists if you rely on that person for something and they underperform to the point it (negatively) impacts you. We all know people who we feel are underpaid (despite not knowing their salary) and that’s because they do a stellar job and make our lives easier.
That’s an interesting concept that salary transparency might lose its interest factor/appeal over time. I wonder if that’s more true for workers comparing themselves to one another than stakeholders comparing the salaries of workers.
It is tricky when salaries of hundreds of public servants are based entirely on politics. We had a kerfuffle up here this summer when the legislature was about to shut down the state government over a 3% raise IN THE CONTRACT. They wanted to negate the contract…even though those employees hadn’t gotten a Cost of living raise for the two years previous and it was already in the contract! Drama! And unfair for all those employees! I feel for you.
Also, as a contracted employee with my company, I have been told multiple times that I am never to let on to any other employee how much I make, how much I work, what my flexibility is like, etc. Because I was hired on as a contracted employee when the company was small and now there are hundreds of employees that have way less freedom than I do. And it seems mean to tell them.
You know, I just heard an episode of Planet Money (i.e., the NPR podcast) about this. It’s called “When Salaries Aren’t Secret” in case you’re interested.
Anyway, this is so interesting. The only experience I’ve had that is remotely related was when I was 15 and worked at Burger King, and there was a boy my age who got hired at the same time as me and had the same job, and he was making 25 cents more per hour than I was. (Grrr. But did I do anything about this? Nope.)
I actually feel like salary transparency would totally wipe out negotiation. I mean, it might make it easier to negotiate for the first two weeks, but as soon as everyone’s salaries had evened out (relative to other people with similar experience/skills), there wouldn’t be much more to negotiate. I actually kind of like that idea. But that might be because I’m not so good at negotiation. :/
Ooh, it would also maybe get rid of the gender gap; that would be cool!
I don’t like standardized pay scales because it rewards seniority, not hard work. I would have hated it had my salary been made public at my old job – I did the work of 3 people! It isn’t fair for everyone to get paid the same – or to get the same raise based on number of years served. I want to get paid based on how much value I add – that’s it.
I completely support that concept. In the new model for education that the government moved to, we have to prove our effectiveness to keep from getting fired (totally makes sense) – but cannot be rewarded extra for it. So, someone who is moderately effective, someone who is effective, and someone who is highly effective all keep their jobs and follow the same standardized pay scale. We shall see how this plays out over time. 🙂
Very interesting concept! My wife and I are in the health care industry where salaries are pretty gender-equal, but the only way we stay up-to-date with how much we are making versus our co-workers is asking the new grads what our companies are offering them. We know in general how much the other professionals are making, but always second-guess ourselves that we’re the lowest paid…lol. Neither of us mind talking about salary if we’re asked, but the only people that ask seem to be the new grads when comparing company offers. I guess everyone else is scared like we are to find out that possibly they are the lowest paid, and therefore just don’t want to know. Ignorance is bliss!!
This is an interesting perspective! I can imagine how you feel because this sounds very similar to when I worked in a corporate public sector role. I knew the salary brackets of my co-workers and it made things awkward because if I knew that someone who was doing the same job as me was paid more, I couldn’t help but feel annoyed and even upset. Especially if I knew they were doing less work or weren’t as committed. With that said, as a freelancer I have recently taken to sharing my income online in my blog. But only because I want to inspire myself to exceed my own goals and also to inspire others if they too want to become self employed and work from home.
I think it’s very inspiring when people share their income, especially online, work-from-home, and side-hustle money!
Hmm, that’s interesting & awkward! Mr Tre works in a similar situation and has expressed similar feelings. When we bought our home someone at work actually told him that he didn’t make enough to buy the house. He was like “Yeah, I don’t” and walked away.
Oof. What a comment to make to someone!
interesting, I guess it is one thing to know your colleagues salaries but another for the public to know about them too. Transparency is a fine line to walk, especially when it comes to salary. You definitely gave me a lot more to think about with this topic.
I hadn’t given the public/stakeholder side much conscious thought until I wrote the post!
I work in a non-profit setting and some of our executive staff salary information is available publicly. Some of my co-workers and myself researched it a while back and were just flabbergasted at the “wage gaps” compared to what we make as mid-level employees. Also, amongst ourselves, we’re not supposed to discuss how much we make, but we all do and I think it allows us to work better as a team. We all get reviewed at the same time, our raises come at the same time, and we’re open about it.
I also believe in transparency of income, I’ve posted all of my monthly reports on my blog that include all spending and income.
Sounds like you’re using it to your advantage very well 🙂
I used to be a federal civil service worker, and so we all easily knew how much everyone made. F.Y.I. No one was worth it. 😛 And for the record, that kid should have gotten some extra coal in his stocking!
Ha! He was actually a wonderful student. But it was one of the most awkward moments in my career!
I think pay transparency definitely can be useful for freelancers. Some other blogger divulging what they charge for sponsored posts was how I set my own rates and it was far higher than I ever expected anyone would pay. Now that’s what most of my blog income is.
I’d love to apply it more to stage management, but stage managers are super tight lipped about what they make and I don’t really understand why. It would definitely help us as a whole to have at least an idea of what the average pay seems to be and whether or not it even increases with experience, or what sort of companies pay best.
Two great cases for pay transparency. Glad you chimed in!
This is a tough question! With CEOs, whose salaries used to be secret, there was a push to make them public in the interest of “transparency,” and so that shareholders could see how ridiculous they were. The effect? Instead of going up because of shareholder pressure, CEO salaries went UP… a LOT. Basically any CEO or would-be CEO would pull the salaries of others, and use that as a negotiating tool to get a better deal for himself (and, very rarely, herself).
How ridiculous that a parent brought up your salary to you! How little do those people value education, if they were implying even for one second that you don’t earn every penny of your pay and then some?! One of our biggest problems as a country is how little we invest in every aspect of education, including how little we pay teachers. I’m sorry that happened!
This was such a good read and I’d have to say I agree on most every point. It’s quite silly to me that pay scales are most often based on length of time with the company as opposed to hard-work. Some people put much more effort in and should be rewarded that way – IMO.
I don’t think salary transparency is necessary, but I do think it would be interesting to see the average salary at a company. It shouldn’t be based solely on what one person makes but rather what the company pays out it’s employees based on what it’s income is. I’m always interested in the balance game there.
Great post, Penny!
Thank you, Alyssa. Averages would definitely be helpful.
This subject is very interesting. One thing I wonder is if making the salaries “public” within the company – so everyone within the company knows everyone else’s salaries but people outside the company don’t – would work to keep companies more honest regarding paying men/women/minorities similarly. I do think companies should have to compile a report that they submit to a government organization for oversight to ensure they’re not paying men vastly more than women or white employees way more than black employees. Our company is a federal government contractor, and we have to compile this report every year. It’s also available to everyone within the company, but the company just quietly posts it to an obscure corner of our website. I’m not sure that anyone looks at it. But it’s basically anonymous. It lists the wages and demographics of employees.
As someone who works in HR and sees everyone’s salaries, I can say it’s an impediment to my ability to do my job happily, and it has never resulted in me being able to negotiate a raise. Because you don’t want to go to your supervisor and say, “I deserve a raise because Jane is making more than me for doing less work!” You want to present your case for a raise by listing your accomplishments and proving that you’re worth the money. In my case, it makes me feel insecure about my worth to the company while also causing me to resent the work. “Why am I even working this hard when Jane makes $15,000 more than me a year and isn’t earning her salary?!” That kind of thing.
Teachers definitely shouldn’t take it personally when a student knows their salary. After all, a 15 year old probably isn’t paying bills or even working an after school job. What do they know about money? But parents should have more sense than that. I’ve never met an overpaid teacher! And I must agree that it makes little sense to force people into a pay schedule that only rewards education and time on the job. That does nothing to motivate outstanding performance from employees.
Wow! What a unique lens you have to view this issue through. I also think bringing other people up in a negotiation would make for an awkward conversation. But what do I know? I couldn’t negotiate a raise if I wanted!
I don’t know how much my coworkers make but in our annual report I can see how many staff are in various pay bands, so I can make an educated guess. I do feel like I am fairly compensated so I feel lucky in that regard.
That’s a great feeling. Do you imagine all of your coworkers feel the same?
You hit on a lot of important points, Penny. I don’t know the perfect solution, but I worked for a group that didn’t ‘allow’ us to discuss our income with each other. How ridiculous is that? Some people might not feel comfortable sharing, but it shouldn’t be a secret if we don’t want it to be.
It’s also awkward when friends and family know (or worse, guess) your income. They sometimes judge your life choices and think you should pay for everything on joint outings, etc. We’re frugal though many seem to think we should spend every cent and not worry about retirement or an emergency fund.
OK – so I about spit our my drink on your comment about spotting plagiarism… Yea – I lacked in getting cards (or return phone calls from many parents too!) My salary is public too – and to be honest I think people would laugh. I am an educator with 27 years of experience and a doctorate. To become a professor (in an accredited college) you need a doctorate – which takes time and money. The experience is key in helping students who want to become teachers too. (Can you really teach pre-service teachers well if you only taught a few years? I am sure a few people can but not many…) So 27 years in and I made $55,000 – and still have to teach, plan, grade, serve on committees, advise students, publish, etc. and I have four degrees. I don’t think my salary is too much – and I am SURE yours isn’t either. Transparency helps with disparities between groups (gender, race, etc.) but there are certainly issues with it as well.