HR executives favor salary transparency.

Position::Pay Scale

With more attention being paid to issues of pay--such as CEO salaries, minimum wages, and the ever-widening income gap--one workplace policy is likely to become an increasingly hot topic in the latter half of this decade: salary transparency.

While salary transparency remains far from widespread, the idea of instituting an open-book policy on what every employee earns is starting to gain traction. In fact, one survey shows that more than half of human resources executives would welcome policies shedding light on salaries.

In the survey, conducted by global outplacement consultancy Challenger, Gray & Christmas, Inc., Chicago, Ill., 55% said that companies should practice some form of salary transparency. Thirty nine percent of those surveyed were opposed to opening the books on salaries.

"There are countless pitfalls related to practicing salary transparency, chief among them the fact that even minor discrepancies between coworkers' salaries can lead to resentment and conflicts over who earns what," notes CEO John A. Challenger.

"Of course, there could be a number of reasons two individuals in the same position earn different salaries. The person with the higher salary may possess a unique or in-demand skill or it may have taken a higher salary offer to lure the worker from his or her previous employer. It simply may be that the higher earner was a better negotiator.

"Even if companies share the reason for a particular worker's higher salary, it may not quell the dissatisfaction among those earning less. The resulting acrimony could sap a department's morale and productivity and lead to increased turnover."

A number of firms have found a way around this potential source of conflict by not sharing individual salaries, but instead divulging information about the range of salaries...

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