A Case Against Telling Your Coworkers What You Earn

One of the more commonly touted tactics to combat wage inequality is to advise people to openly discuss their salaries with co-workers and perhaps even friends.

Earlier this week President Obama signed an executive order banning federal contractors from retaliating against employees who discuss salaries at work. In an article discussing the move, Fortune magazine suggested that we all break the American Taboo of discussing our salaries. The idea is that if we are more open to discussing our salaries with friends, family and co-workers, it will pave the way for greater wage equality in our society, because people who are paid less can “ask for a raise” or at least advocate for themselves.

While I don’t dispute the notion that transparency can prevent people from being underpaid, the chaos that can be caused by people sharing their salaries suggests that there needs to be a better way to share that information.

Several years ago I was a junior executive at an IT Services Company. In a nutshell Fortune 500-sized companies would outsource a portion of their IT operations to us. This could mean running a global data center operation for a client, providing infrastructure support for a video game studio, managing infrastructure for a financial services company, etc.

While we were a part of a multi-billion dollar company, we were a small subsidiary that operated more like a smaller company than the multi-national conglomerate we were part of. As a result, the phrase “everyone knew everyone else’s business or at least thought they did,” was a pretty accurate statement. Needless to say this sort of gossipy transparency, translated to salaries.

One of the first things I had to do when I first stepped into the role was fix one of our operations in California, which suffered from a combination of morale and operational quality issues. On the morale side, one of the biggest gripes was salary; people were angry because salaries were all over the place. You could have an instance where someone made less than one of the people they managed, or other resources had inexplicably high salaries that didn’t make sense given their responsibilities.

It was one of the more chaotic and unhappy work environments I’ve ever stepped into. The transparency didn’t lead to people getting paid fairly; instead, it was a source of jealousy and envy, not to mention outright accusations around why person X made more than person Y.

Ultimately it’s not so much whether or not people know how much their co-workers make, it’s whether or not management is invested creating a work environment where people are paid fairly.

My solution to the problem was to clearly define roles and levels within each role (e.g. you could be a level 2 engineering lead), and pay bands for each. Next I had my management team evaluate each worker and slot him or her into a level; if they made less than the appropriate pay band we gave them a back dated raise. We’d also talk to them about how and why rated them at a certain level, and give them a plan (we’d pay for any necessary training) to help them advance to the next level and get a raise.

Finally, I published the pay bands so that people knew what the requirements were for each pay level and what the pay range was.

This only partially solved the problem. Everyone still knew what everyone else made, and jealousy often overruled logic in terms of people deciding who did and didn’t deserve to make more than they did. Over time I began to realize that it wasn’t so much salary inconsistencies that made people angry, as it was the idea that someone was being paid more than they were, regardless of the reason.

Admittedly, sexism drove some of the envy in that workplace (the one woman on a team of 60 was one of the highest paid), but overall, it was mostly people griping over the fact that they didn’t think someone else deserved a higher salary, even if that person had qualifications they didn’t.

At other locations where management had always encouraged people not to disclose their salaries (it was never a policy, just a suggestion), we never ran into the same problems. As we started to encourage people to do the same in California, as the team turned over, etc., the problem eventually went away.

A lot of people shared their salaries at our corporate office and we had similar issues with jealousy, with no impact on wage equality, especially when it came to women.

When I took over the IT services business unit, I noticed that my most productive managers (in terms of the dollar value of the business she ran for me) was being paid similar to men who worked for her, and earned $10K-$20K less than her peers. When I put her in for a raise the amount was questioned by my superiors “this is a big increase, isn’t she already doing the job, does it matter if her peers are being paid more?” It took me sharing with them that she was looking for another job to scare them into pushing the increase through.

Knowing she was being screwed over salary-wise didn’t exactly help her, having a manager who knew it was wrong and who was willing to advocate for her did.

The other aspect of openly discussing salaries is that it leads to a rumor mill, and misinformation always trumps the truth. The proverbial “world around the campfire” with respect to the salaries of several people (myself included) was flat out wrong, which led to all sorts of unnecessary internal tensions, including resignations.

I’ve been a consultant since the early ’00s for a variety of companies, and I’ve yet to see a situation where open disclosures of salaries doesn’t generate a lot of envy and hurt morale. I’ve suffered through a couple of pretty bad situations that started with someone accidentally putting the team’s salaries or consultant billing rates on an internal web site.

I call it the “bigger piece of cake syndrome”, where the logic around why someone is getting paid more is trumped by something similar to the feeling a child has when they get upset over their parent giving a sibling a slightly larger piece of cake.

All that being said, situations where I’ve noticed wage transparency not hurting the work environment, friendships, etc., were the low-wage jobs I worked in college and high school, and the first jobs my friends and I had coming out of college. However, where I think those situations differ is that those work environments aren’t as competitive, people are in the same boat and/or the stakes aren’t as high.

Higher wage, professional environments, and/or situations where your co-workers have families to support can change things significantly. I can’t tell you how many times I’ve heard someone invoke the fact that they have a family as a reason they should get more than someone else, while completely ignoring the fact that someone else had more responsibility, was more productive, etc. It’s the type of response that taught me to stop disclosing my own income.

A better solution to sharing wage data is one that’s employed by my current client: different roles have levels assigned to them, the levels have pay bands assigned to them and based on those two data points you can estimate your co-worker’s salary range.

But no one talks about their salaries or levels, UNLESS something comes up where say only people a certain level and above can do certain things, approve certain activities, etc. But even in that case, people only disclose their level.

Despite all that, I still regularly hear people express irritation at someone else’s level, that it’s not fair that someone else is the same level as they are, etc. I’ve seen it at other clients too, because even if people aren’t openly discussing salaries, people often have a pretty good idea of who makes what.

While I don’t support implementing policies that punish people for discussing their salaries, if someone who worked for me were to ask my opinion on the topic I would suggest keeping that information private due to the chaos it could cause. I think a better approach is for a company to publish the pay bands for various roles, and for each group to anonymously disclose the range of bands for the various positions in that department. This solution provides the transparency that people need to advocate for themselves, while sidestepping a lot of problems.

As for me, the only person I’ve shared my current salary with is my girlfriend, because: A) we consider ourselves un-officially married B) we make financial decisions/plans/look at investments and business ideas together C) I do her taxes and help plan her retirement investments, so it’s only fair.

Beyond that, I don’t see the value of disclosing that information to anyone.

 

Markham Lee is a freelance writer based in Seattle who has spilled pixels on topics ranging from music, relationships, television, and those instances where life is stranger than fiction. He’s also working on a science fiction novel he hopes to finish before 2020. His work has been published by Nerve.com, The Frisky, Pop Matters, and Seeking Alpha. You can find more of his writing on his blog, and some of his more random, yet semi-intelligent thoughts on Twitter.

Photo: Wikimedia Commons

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34 Comments / Post A Comment

A) Ok, this was obviously written by someone who’s never actually been afraid they’re making less because of their gender and/or race. It’s too bad this wasn’t posted on Equal Pay Day for full ironic impact, but close enough. (that’s not to say the writer ISN’T necessarily a woman and/or nonwhite, but that for whatever lucky reason, he’s never felt it held against him in salary offers)

B) The reason we should still keep talking about pay with our coworkers?
It took me sharing with them that she was looking for another job to scare them into pushing the increase through. Reminds me so much of how the only way to shut up men sometimes is casually (or not so casually) mentioning your significant other. A woman’s “no,” or in this case, her worth to you as an employee, is only given weight when she indicates her value to someone else. When that raise isn’t questioned and it’s gladly given to her as a result of her productivity and success, then we can stop talking about pay.

C) That being said, I do believe in being judicious in who you tell your salary.

Meaghano (#529)

“the one woman on a team of 60″ oof

Allison (#4,509)

@Meaghano I saw that and my first thought was “but discussing salary was the biggest issue there? Really?”

garli (#4,150)

@Allison Obvs. The one woman was ruining everything.

Markham (#1,862)

@garli @meaghano @Allison – in all fairness: if our nearly all female recruiting staff and the one woman on that team (who screened people, coordinated with the recruiters and did a lot of the interviewing) weren’t able to find many woman candidates, was my team’s problem our a function of a our society that doesn’t encourage women to pursue STEM careers?

In my engineering classes in college there were often only 3-5 women….

Just saying…

-M

P.S. I also gleefully fired about ten sexist nerd bros 30 days into my tenure, so, again…..

Marge (#4,715)

I work for an organization where salary is very attached to the title someone holds. It fucking sucks when someone who spends more of their day instagramming their manicure or planning their wedding asks for and gets a promotion or title change because everyone knows that goes hand in hand with a decent raise. I’ve been advocating for a title change for myself for the past year, and I’m not going to get it, because they don’t want to give me a raise. It’s got to the point where my duties and responsibilities really don’t match my title, and it’s embarrassing to apply for Senior Management and Director level positions at other places when my current title is assistant manager.
I’m sorry Mr. Markham, but your findings don’t really sway me. Although I do agree that morale and salary go hand in hand.

Allison (#4,509)

@Marge In my work environment it’s certainly frustrating to know that half the work we do checking the output of people in other departments making more than us. But that means we have to opportunity to advocate for a reevaluation of our own pay grades.

And good luck with the job hunt, hopefully if you detail your work experience and duties a good hiring manager will see that your title means diddly, and you can get into an interview and explain further.

garli (#4,150)

Due to a combination of having super unprofessional HR and being involved with implementing our company’s ERP where people’s rates turned up in places you wouldn’t normally expect them.

There are so people who get paid more than I do where I 100% agree, understand and think it’s correct. There are some people who make more than I do which makes me rage crazy. (With legit, measurable performance metrics where I kick the crap out of them, professionally).

Luckily? Unluckily I have a boss I can be totally honest with – I know what X, Y and Z get paid. _% more than me? Nope, not going to work. He couldn’t give me a raise (I already had two that year and some other political stuff) but he did get my company to pay for a fairly pricy certification program (~10k) and promised to bump my salary part way through it and at completion. He told me if he can’t get the money for a good raise when I’m done to go somewhere else.

If I hadn’t seen real numbers I never would have thought to ask for it. Clearly I can’t trust my company to treat me fairly.

hooles (#6,307)

I thought this was a really interesting take on salary knowledge. We don’t discuss specific compensation at my office – everyone generally makes similar salaries, depending on your position. The real difference comes in at bonus time, and our bonuses become higher and higher portions of overall compensation as you move up in the organization (for instance, my first year, my bonus was 5% of my total comp. last year (my third), it was closer to 20%). This increasing ratio of bonus to comp is well-established at my firm, and I think it’s in part to encourage people to stick it out (e.g., stay a few more years and you’ll make so much more, really!). Additionally, bonuses tend to be standardized at the lower levels – you can receive bumps up or down from the standard for travel or outstanding performance, but you’ll usually hit the average. Bonuses become much more performance-based and firm-profits-based as you get promoted, and they vary more widely.

I think it just comes down to trust – I believe the management of my company rewards people for their performance, end of story (and my coworkers seem to agree). But I think such trust in a company is relatively rare, and I doubt I would feel this way at most other firms. Part of the joy (relative joy) of working here is the fairness aspect of it – that you get out what you put in.

stinapag (#2,144)

I work for a government agency in the state of Texas. A few years ago, the Texas Tribune started the Government Employee Salary Database (http://www.texastribune.org/library/data/government-employee-salaries/). They file open records requests on salary information with most agencies in the state, and then they publish that data on their website. You can search by name, agency, job title and departments within agencies.

Generally, I think it’s a good thing as I do think it results in better equity and generally higher salaries, but there are some problems. First, the data can get dated pretty quickly. My salary is listed from early 2012, and I’ve had two raises since. If a potential employer looks me up, they may think I’m used to making a certain amount and may try to lowball me in salary negotiations. Second, titles aren’t exactly descriptive of what someone actually does. Someone in one agency may be an Administrative Assistant II with vastly different qualifications and skills required for the Administrative Assistant II in another agency. Within an agency there may even be discrepancies in titles what the titles mean. Also, as I understand it, this is just base salary information. Bonuses and other forms of compensation aren’t included, which may make some people (especially in academics) look like they make much more than they do.

As far as I know, I still make less than a male colleague who got his degree two years after I did (I’m female). He also had a more senior title than I did for many years. The argument I’ve gotten is that he a) worked at the agency albeit for a different department for 10 years before getting the degree, and b) he worked in the department while he was getting the degree and for some reason that counts towards his seniority for the title.

peutetre (#2,641)

So it’s better to be ignorant as how your salary compares to others, so you don’t feel jealous and create “chaos” at a workplace that (potentially) doesn’t pay you equally?

@peutetre Hey, you know, you have to protect the workplace at all costs. It’s those pesky employees that get in the way.

manda (#6,108)

@peutetre Right? I don’t think it’s the salary disclosure that’s a problem at workplaces that are built on a foundation of sexism, it’s the sexism. It sounds like the chaos that was caused in these offices wasn’t chaos as much as it was people who were the beneficiaries of privilege feeling uncomfortable when that privilege was threatened. That sounds pretty good to me.

Markham (#1,862)

@manda I comment on this below.

Also, if nearly everyone in the office is white and came from upper income backgrounds, the privilege field is pretty level.

@Markham You’d be amazed, though, how the natural jealousy of people (which you talk about) has the effect of causing people to find ways to draw distinctions among themselves and attribute mistreatment to them: I used to be a labor union grievance officer, and there was an employee who insisted that he was being disciplined more than his coworkers because he was Albanian. I felt bad for the dude, because it was clear that this idea was rooted in a strong sense of national pride and identity, but I was sure that his waspy suburban manager had no idea where he was from – to her, he was just another white dude with a funny accent. Another union member swore he was getting less overtime because he was Puerto Rican and his manager was Dominican. That would have made sense except that ALL of his coworkers were also Puerto Rican.

Markham (#1,862)

Hello -

1st – thanks for reading

2nd, a couple of notes:

- During the time I ran that business, the one woman on the team ran a lot of our recruiting and hiring, (if she didn’t think you were good enough, you weren’t getting hired) and she definitely tried to recruit more women. Unfortunately during my tenure at that role, I think we interviewed, one, maybe two women down in California.

At HQ it was a lot better, my “right hand” so to speak was a woman, as was my top manager below her and when interviewing for my “right hand” I helped to get the other two women who interviewed hired by my peers.

Trust me, it wasn’t intentional.

2) I’m a 200 lbs Black man who still looks like the former college athlete he used to be, head affirmative action cracks all through college, heard “why should “YOU” get paid that much, had co-workers shocked that I don’t currently live in, nor grew up in “the hood”, etc, trust me I get it.

Especially since I suspect some of the animosity directed towards me and knowledge of my salary over the years was definitely race based.

I just think you can share salary information anonymously to avoid ruckus.

Say you have 10 people in a department, you publish all 10 salaries + note the role, but just have it anonymized – so employees A-H or something. This gives you the data you need while avoiding all the jealousy.

In the end you know what people in the group are being paid, not what a specific person is being paid.

Thanks again for reading

-Markham

peutetre (#2,641)

@Markham At least part of the benefit of having salary information available to you is to be able to negotiate for a raise, as you note, but I disagree with your assertion that providing anonymized salary information gives people the ‘transparency they need to advocate for themselves.’

If there are 5 people in your role at your company, making 5 different salaries, keeping them anonymous makes it difficult for you to negotiate a raise or to determine which qualities management values over others.

It would be very difficult to advocate for yourself if all you know is that SOMEONE was making more than you, but you don’t know if it’s Employee A, who has worked here the longest; Employee B, who stays late every night; Employee C, who went to the boss’s alma mater; or Employee D, the only man. You can’t exactly sit down at your performance review and conjecture wildly about who might be making more for whatever reason, and why you fulfill that characteristic as well.

While I think salary information is hugely important in terms of underrepresented groups gaining equal footing in the workplace, even if every employee is a rich, straight, white man, lack of identifying information with respect to salary makes it difficult to see what management (literally) values.

Markham (#1,862)

@peutetre

But ultimately you have to make a case for salary based on the value YOU’RE delivering, you can’t necessarily replicate what someone else is doing.

If I’m evaluating you for a bonus, raise, etc., the argument of “I’ve been here longer than sally, or I have more education than John” are “okay” arguments, but they’re not really what I’m looking for.

You need to tell me what YOU did that’s especially value and equate that to a higher salary.

For instance I can recall one time when one of my directs pretty much waltzed through his bonus review with ease, and had a great case for me giving him a raise.

Why?

He came to me with a proposal that tacked on about 20% to the profit margins of his group, and he stepped up to work on a bunch of cross organization projects (some of which were his idea).

It was a no brainer.

Another of his co-workers did something similar by bringing in a bunch of new business and really improving the quality of her operations.

If you look at the list of people and see someone making more, knowing that John did X and he makes more is only “kind of” valuable. Ultimately you need to show initiative and articulate a case for the value that you bring to the table that JOHN DOESN’T – that’s how you distinguish yourself.

You don’t need to know who makes what. You just need to know the range management is willing to pay, then you work on your case and engage with leadership to learn what else you can do.

Especially since performance trumps education, tenure, etc., (in most private sector white collar roles at least) – and honestly, if your management isn’t willing to engage with you to give you feedback on the things you want to do to earn pay bumps the org sucks and you should look for another job.

-M

Remember that time when we decided that one person’s (even if it’s your own!) personal experience shouldn’t decide support for/against an entire issue? No?

Markham (#1,862)

@Jake Reinhardt that’s a fair point to a degree, but if we say no one’s experience should decide support for/against an issue, then we can’t use anyone’s opinion, period.

That being said: having been in the consulting business for over ten years and with a variety of companies + the above is largely based on a time where I spent six weeks arguing with c-level executives of a publicly traded company to get the women in my group paid fairly, had an eight figure payroll, operated in five countries, had over ten different teams under me, and was tasked with solving the primary issue of wage fairness, morale, etc., I think my opinion is a bit more informed than most, no?

r&rkd (#1,657)

A union contract, with contractual pay scales, would also seem like a solution!

danyell (#6,414)

Just to be clear, while the author “doesn’t support” punishing people for discussing salary, it is illegal for most private companies to create policies against sharing salary information under the NLRA. And further, the reason its illegal is because knowing others’ salaries is key to helping employees engage in activities to improve their working conditions and recognizing possible discrimination. So, not sure I agree with the idea that its harmful to share this information.

EmilyAnomaly (#4,238)

@danyell do you have a source for this information? I don’t doubt you, I just want to have it on hand. Where I work, it’s in our hand book that discussing our pay with coworkers is grounds for immediate dismissal

MissMushkila (#1,044)

@danyell It’s a federal law – the National Labor Rights Act. However lots of workplaces have that listed in contracts or handbooks. It isn’t actionable (if they were to fire you on that basis, you would have a case), but they hope that just putting it into print scares employees into keeping silent about pay. Or they just don’t know better.

This link explains it pretty well – you can also look up the specific text of the NLRA section 7 and 8.
http://www.twc.state.tx.us/news/efte/salary_discussions.html

Employers CAN restrict you from sharing your salary outside of the workplace – on the basis that it is a “trade secret” – but not from telling other employees of the same organization.

r&rkd (#1,657)

Though it looks like the people Markham is talking about were managers or supervisors, who don’t count as “employees” for the purposes of how that word is used in the NLRA, and therefore don’t have any protections under the NLRA. :(

As mentioned, union shops and government workplaces are two situations where everyone’s salary is knowable and it seems to work OK. Of course there is still jealousy, but that may just be the inevitable consequence of being human and coming into contact with other humans: we are prideful and we covet.

Markham is totally right that the best solution is a pay structure that is logical, merit- and responsibility-based, and transparent (i.e., even if you aren’t sure who makes what, you know that salaries follow an established set of rules). The problem is that a solution like that depends not only on good management, but on honest management – and those aren’t always the same! It seems to me entirely plausible that managers might maintain morale and productivity while regulating costs by keeping everyone happily ignorant about everyone else’s salary. So from management’s (or shareholders’) perspective, salary secrecy is good. But for employees, the surest way to bring about a fair pay structure is through complete disclosure, as Markham’s anecdote demonstrates.

garli (#4,150)

@Josh Michtom@facebook It also depends on workplace size. I work in a company with 250 employees. There are 4 people with my title, one in each division. Same for my old title. If you published salary info based on position it would be obvious who made what.

Markham (#1,862)

@Josh Michtom@facebook before I took over that division salaries were all over the place as there weren’t any guidelines, I think guidelines keep people in check. If you know you HAVE to pay within a certain range for a certain role, and you do a good job of setting a fair floor for salaries, you avoid a lot of BS.

But ultimately it comes down to fair and honest management.

As I said – everyone know what everyone made before I got there and it didn’t do anything to advance the cause of fair pay, especially for the women in the group (at HQ especially).

Side note: the guy I took over for went to another company and was promptly fired for sexual harassment.

Elsajeni (#1,763)

@Markham Right, just knowing that the women in your division are being underpaid isn’t going to magically create wage equality. That’s not what anyone is arguing. You have to be willing to fight for it, and/or your management has to be willing to treat you fairly and fight for you with the people above them. The point is that, if you don’t know there’s a disparity, you can’t start that fight.

EmilyAnomaly (#4,238)

Where I work, there is a rule that you can’t be granted more than a 15% raise when you change positions within the company. For this reason, there are people who are in the same position and at the same level (I, II, III, IV) but are paid differently based on how they were paid where they were before they transfered. It’s really disheartening, because why try hard to move up quickly in the company?

Chel (#2,960)

The idea of just publishing everyone’s salaries anonymously is a nice one but doesn’t work in a lot of businesses. My department has three people. One of them left a couple of months ago and I asked him how much he was hired in at and how much he was making when he left. I told him I was going to ask for a raise since I would be taking on a lot of his duties for a while and if he didn’t want to tell me that was totally fine.

I found out he was hired at about $5K more than I was making at the time. He had been hired to be my replacement when I was promoted. And he had been receiving regular increases ever since. He had earned a few new qualifications so some of that increase was understandable. But the beginning salary pissed me off. Before I knew what my co-worker had been making I was going to ask for $5K and thought that was a reach. I went directly to the CEO and told him what additional work I had taken on, the salary research I had done and I asked for $15K. I got it.

seakelps (#5,146)

aaaaah calling people “resources” aaaaaah

morecakeplease (#6,311)

I think the pay band system is a good compromise. I once worked for a large company that accidentally published the starting pay for open positions on its internal careers site. I was perusing the site one day and found a posting for a position identical to the one I held. Shockingly, the pay was more than I was earning at the time. I thought “so, I could quit and reapply for my own job, and potentially earn more money than I do now?” I spoke with my manager about it and, as it turns out, the company had been continually raising the starting salary for positions without adjusting the pay for existing employees. The result was that the longer you worked there, the less you made. My boss agreed to adjust my salary, but did not intend to do so for everyone else. I’m not one to discuss salary, but I brought it up with some of my coworkers (without mentioning dollar figures). My coworkers immediately began naming their salaries, and sure enough, a coworker who had been there 5 years longer than me was making about $10,000/year less for the same job, and $15,000/year less than new hires for the same position. Needless to say, he was furious. In the end, the company switched to a pay band system and made the pay bands and positions public knowledge, which at least ensured that nobody ever made less than a new hire in the same position.

I’m in a similar work situation where morale is low, everyone knows each other’s salaries, and job descriptions are weird and fluid. There is absolutely jealousy and “why should I do that?” sort of anger floating around.

That being said, this was never a good work environment to start with. I think I would say that the type of people who will be especially spiteful and comparative in terms of work/salary are people who were like that already. What I mean is, there’s a certain work personality that can make everyone miserable, and that’s based on the person, not the particulars of that office. I’m not saying this isn’t a problem, but let’s figure out exactly what the issue is, not just the signifiers.

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