To Be or Not To Be…Transparent

​I am sure many of you have heard about the Google doc heard round the world containing the salaries that Microsoft employees shared anonymously in a spreadsheet so that they “can all get paid more together”.  Employees shared years of experience, tenure at Microsoft, merit %, base pay, bonus, and stock information.  Almost 400 employees provided data.  This phenomenon prompted a website to be created for engineers at different companies to share their salaries – a unionizing type of approach to increase compensation across the tech industry.

I have always been an advocate of companies providing transparency when it comes to their compensation program – not to be confused with their compensation data.  Let me explain.  Employees want to feel that the employer is taking care of them financially in line with the market.  In order to feel comfortable that this is occurring, employees need to understand how compensation is reviewed and analyzed.  Employers can do that by being open about how they create their compensation programs: philosophy, salary surveys used, market data analysis and job mapping process, salary grade and range development, bonus program philosophy, stock plan criteria, internal equity, correlation to performance.  Specifics such as the actual ranges do not necessarily need to be shared and arguably may not be wise to share for competitive reasons, but an employer being open about how they arrive at compensation packages can go a long way in building trust with employees. 

My Mom used to say “no” to me as a kid.  A horrible word for a teenager to hear!  However, she then followed that up with the “why” she was saying no.  I still may not have liked the “no”, but I at least had insight into her line of thinking on why that was her answer.  The same goes for employees.  It is much easier to accept something when you understand how the answer was determined.
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I have been part of compensation re-design projects for over twenty years.  The best implementations have always been when we took the time to go through the re-design project and results with employees.  We didn’t give specifics, but we did provide a level of understanding as to why we started the project, what happened during the project, and the final result including details on the new compensation program.
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I am a bit old school in the sense that I do not think employees should discuss their compensation with colleagues.  I was taught to not discuss money matters with others.  However, I wonder if Google spreadsheets and salary websites would be popping up if employees had more insight into their employer’s compensation philosophy and program.