Dive Brief:
- A new study found that not discussing wages is such a strong social norm that people are willing to pay money to keep their earnings secret. In a survey of 750 workers by researchers at UCLA and Harvard Business School for a National Bureau of Economic Research report, 80% of respondents said they would pay to keep co-workers from learning their salaries. And about half of those polled said they wouldn't accept $125 in exchange for telling five of their peers what they earn.
- Most respondents also said it's socially unacceptable to ask co-workers about their salaries. And 89% of respondents said they believe that if they ask co-workers about their salaries, they will get asked about their own salaries. "Thus, employees may be afraid to ask coworkers about their salaries because that may force them to reveal their own salaries, which they dislike," the report said.
- Most employees report that they would prefer their employer to be more transparent about pay, the researchers said, but data from a separate survey indicated that employees would choose more transparency only if it is anonymous.
Dive Insight:
As calls for pay transparency become louder, implementation may prove challenging. "Transparency," however, can have multiple levels, and it seems that employees may not necessarily want their exact salary on display. Some employers, however, are finding success with improved transparency around how pay is set.
One survey, for example, found that pay perception — how employees feel about their organization's approach to pay fairness and transparency — had a higher impact on their job satisfaction than the amount they were paid. The PayScale research from last year found that of the respondents who felt they were underpaid, 90% actually were paid at or above the market rate, and 75% of respondents who think they're paid on or above the market rate are satisfied with their jobs.
This means that employers may need to do a better job of identifying the factors that go into setting pay — prior experience, degrees, market research, etc. — and train managers to communicate that to employees. PayScale recommends providing employees with a "total comp statement" as part of this effort.
And even those who aren't moving in that direction are still feeling the pressure from the combination of this movement and state and local laws outlawing pay questions. In response, some have been standardizing compensation structures, relying more market information and discussing pay earlier in the hiring process.
