3 points of view

Should you know your workmate's salary?

Three experts discuss the pros and cons of making salaries transparent.

The premise: a 2015 survey of 71,000 US employees found Staff are more engaged at work when there is an honest and open approach to how much people are paid and why. So what are the pitfalls and pluses of salary disclosure?

  • reduce the gender pay gap reduce the gender pay gap

  • Transparency is important Transparency is important

  • Institute an open culture Institute an open culture

  • reduce the gender pay gap reduce the gender pay gap

    Libby Lyons

    Director, Workplace Gender Equality Agency

    Our latest data shows women in Australia who work full-time earn, on average, 23.1 per cent less than men working full-time – nearly $27,000 less a year.

    We know that when pay decisions are left purely to a manager’s discretion and an individual’s negotiating skills, there is more capacity for unconscious bias to impact on pay outcomes, resulting in larger pay gaps. This can be seen in the difference in pay gaps between an individual’s base salary and total remuneration – the data clearly shows that where there is access to additional income, including bonuses or extra entitlements, they go disproportionately to men.

    The UK is introducing mandatory gender pay gap reporting for employers who have 250 employees or more, and we will be watching closely to see if this transparency has a measurable impact. 

  • Transparency is important Transparency is important

    Michael Harmer

    Chairman, Harmers Workplace Lawyers

    It can be extremely important to have transparency around what people earn, and the appraisal mechanism and criteria through which that is determined.

    An open-book culture can generate real trust and confidence that the remuneration system is aligned to the values of the organisation and operates fairly.

    In contrast, if an organisation requires confidentiality around pay levels, it can contractually bind employees not to reveal their income to others in the organisation. But this can prove hard to enforce in practice, and loose and less than complete information can cause misunderstanding and resentment.

    With either culture, it can be a serious breach of contract to disclose income levels of co-workers to those outside the organisation, as this can increase exposure to poaching.

  • Institute an open culture Institute an open culture

    Nick Deligiannis

    Managing director, Hays (Australia & New Zealand)

    Ask yourself, does your organisation have an open culture? Are position descriptions available for all staff to see? Do people know what they need to do to qualify for a pay rise? Are you able to justify why one person’s salary is higher than another? Do you have managers who could have difficult conversations about pay differences?

    If you answered ‘yes’, then it’s worth considering the benefits of salary transparency. These include giving staff a motivation to work harder, the potential to help close the gender wage gap and ensuring salaries equate to the true value of a job.

    If you answered ‘no’ to several questions, your organisation isn’t ready. If you were to offer transparent salaries at this point, you’d face drawbacks ranging from employees becoming upset that their salary is no longer private to demoralising staff who don’t understand the reasons behind the salaries of others.

“Our latest data shows women who work full-time earn, on average, 23.1 per cent less than men working full-time.”

meet the innovator

How drones can save lives, money and the environment

How drones can save lives

Using drones in groundbreaking ways could transform how scientists and aid agencies work, says Dr Catherine Ball.
Using drones in groundbreaking ways could transform how scientists and aid agencies work, says Dr Catherine Ball.

The Professor

Why focus is the key to an effective business strategy

Focus is the key to an effective business strategy

Effective business strategies can be awesomely powerful, but they won’t work if you lose focus.
Effective business strategies can be awesomely powerful, but they won’t work if you lose focus.

How many people

How many people does it take to close a gender pay gap?

How to close a gender pay gap

AIM’s Gender Pay Gap report found female managers are still paid 10 per cent less than male managers doing the same job.
AIM’s Gender Pay Gap report found female managers are still paid 10 per cent less than male managers doing the same job.

Sport

How the women's AFL launched in just 18 months

How the women's AFL launched in just 18 months

When the timeline to set up a national women’s AFL competition was cut from four years to 18 months, there was no new administrative team to tackle the tricky project. So how did the AFL do it?
When the timeline to set up a national women’s AFL competition was cut from four years to 18 months, there was no new administrative team to tackle the tricky project. So how did the AFL do it?

Teamwork

Lavish My Fair Lady revival a labour of love

Lavish My Fair Lady revival a labour of love

The 60th anniversary revival of My Fair Lady at Sydney Opera House was a faithful recreation of the original production, with the first Eliza Doolittle, Julie Andrews, on board as director.
The 60th anniversary revival of My Fair Lady at Sydney Opera House was a faithful recreation of the original production, with the first Eliza Doolittle, Julie Andrews, on board as director.

meet the innovator

How creativity and innovation help make happy customers

How innovation helps make happy customers

Creativity has been a pathway to success for Mark Wengritzky, but his innovations are still based on giving customers what they want.
Creativity has been a pathway to success for Mark Wengritzky, but his innovations are still based on giving customers what they want.

How many people

Behind the scenes of a much-loved Christmas tradition

Looking at the Myer Christmas Windows

Lining up to see the Myer Christmas windows in Melbourne and Brisbane is a festive season highlight for many Australians. How many people does it take to create the spectacular tableaux?
Lining up to see the Myer Christmas windows in Melbourne and Brisbane is a festive season highlight for many Australians. How many people does it take to create the spectacular tableaux?

3 points of view

Should a leader drink at the office Christmas party?

Leaders and Christmas party drinks

Three experts look at how a boss should behave at the work Christmas party.
Three experts look at how a boss should behave at the work Christmas party.