Imagine knowing, without a doubt, where you stand among your coworkers. No more agreeing to proposed salaries in oblivion or wondering what Rob in accounting is making every month and how he got so many vacation days—it’s definitely an uncomfortable idea, but one that’s worth powering through in a time when only 36% of employees believe that they are paid fair wages, and only 21% report that their company is transparent about pay.
Most employees have no idea how their paycheck compares to their coworkers’, but David Burkus argues that it’s their right to know.
“Initially, it struck me as, ‘that’s weird, and it totally doesn’t serve the needs of the employee,’” said Burkus, associate professor of management at Oral Roberts University and author of Under New Management, “and the more research I did, the more evidence I found that transparency is the better way to go.”
Burkus, ORU alumnus and author of the upcoming book “Friend of a Friend: Understanding the Hidden Networks That Can Transform Your Life and Career,” has studied management and leadership techniques in successful businesses.
“Openness is the only way to achieve fairness,” Burkus said in his TED Talk, entitled “That’s why you should know how much your coworkers get paid.” He spoke at the University of Nevada in 2016 and stands by this statement still.
With the gender-wage gap sitting at a stationary 77 cents per dollar, Burkus points his finger at the looming presence of information asymmetry, which occurs when one economic party holds a higher level of knowledge about a transaction than another. In this case, the employer is operating with intimate knowledge of internal affairs—salaries, benefits and policies—while the employee is operating practically in ignorance.
But most companies aren’t intentionally keeping employee wages on the down-low. According to Burkus, many companies desire to mend their wage gap, but they either don’t know there’s a problem or don’t want to commit to changing the way they’ve always done things. Companies that endeavor to become more transparent about wages also have to deal with the skeletons they’ve been hiding in their corporate closets.
“If you have a commitment to transparency, then you have to do the hard work of fixing things as they become revealed. You can’t just pray that no one finds it,” Burkus said. “Openness is the only way to achieve fairness, but it won’t happen right away. It forces senior leadership to do the hard work of looking at their pay practices and changing them to be fair. It’s about making it uncomfortable for leaders to remain unfair or withdrawn from doing hard work.”
While more than 40 percent of private companies still operate under a closed-door system, Burkus is conscious of companies like Buffer, who operate in complete transparency.
“Not only does Buffer let employees know what everyone is paid, they also post it online so that users, customers and investors can see.”
Burkus also notes that workplace transparency affects more than just an employee’s wages. Through honest conversations, the employer-employee relationship can be strengthened, loyalty is born and honesty is more than just a policy—it becomes the driving force in a company’s success.
“There’s a strong relationship between an employees’ intention to quit and the level of transparency in a workplace. Pay transparency and honest conversations about why someone’s pay is what it is, and how the company arrived at that number, can be motivating.”