Two people of equal value and skill will both think they're better than the other person, and thus deserve higher compensation. How do you reconcile that with salary transparency? Seems like you'll be making more people unhappy.
Would wages turn into status goods, where both of those people continuously ask for raises because in their view they're underpaid, and eventually get denied, which will probably offend them and cause them to leave?
Secondly, does this actually solve any problems that simple backchannels between employees don't? People already talk about salary at lunch breaks or over coffee; the advantage is that those are private conversations between friends, rather than your salary being broadcasted to everyone for them to judge. What problem does this actually solve?
The salaries of public sector workers are public, as are the CEO and other parts of upper management in public companies. Everyone's salary is some countries are available to the public.
Quoting from that Atlantic article:
> The worse the individuals' pay was relative to the median, the worse their satisfaction. Those at or above the median, however, experienced no change in job satisfaction or job search intention.
> These economists conclude that pay transparency just makes workers who are on the low-end of the pay scale feel worse about their jobs, so it accomplishes little. Linda Barrington notes, however, that this contention misses a benefit of being unsatisfied: the likelihood of moving on .... to another job, which would match that improved performance with better pay
Regarding the second, backchannels, again we can look to real-world examples to show how difficult or delayed those backchannels might be. Consider Lilly Ledbetter, who was hired as a supervisor in 1979. It wasn't until (quoting from http://content.time.com/time/nation/article/0,8599,1874954,0... )
> Shortly before she was due to retire in 1998, an anonymous co-worker slipped a note into her mailbox at work comparing her pay against that of three other male counterparts. Ledbetter was making $3,727 per month, while men doing the same job were paid $4,286 to $5,236 per month.
> Her co-workers bragged about their overtime pay, but Goodyear did not allow its employees to discuss their pay
She filed an EEOC complaint, which the Supreme Court said wasn't allowed under the law because it the discriminatory acts of the past decades were older than the statutory 180 days for filing an EEOC complaint. The result was the Lilly Ledbetter Fair Pay Act of 2009, which resets the clock after each paycheck made from the result of a discriminatory act.
Since it's easy to show existing cases where people don't talk about their salaries though back channels, your belief that "people already talk about salary" may be true for some, but surely is not universally true.
Plus, how many of those people are not telling the full truth?
This is a good point, especially regarding what would happen at a company immediately after going from opaque to transparent on salaries.
However, the resolution is pretty simple. Employees can either accept the justification given by management or not. If they are disgruntled about it, they can try their luck at a different employer, or use the information to learn how they can get a raise. This last point is one of the benefits for employees—they learn what would get them more money at their current employer.
Example: person 1 makes 15% more than person 2, and now both are aware of it. Person 2 is upset and talks to their manager. They find out the reason is because person 1 has additional education/certification and a couple years more experience. Now person 2 knows they can pursue the extra education/certification and use it as leverage to get a raise, when prior to the transparency they would have had no idea and possibly gone awhile longer making less money.
The company I work for tries to do this by giving you a "salary ratio" of you to everyone in your peer group (i.e. if your salary ratio is 1.06, you make 1.06x the mean salary within your band). By all accounts (verified with private conversations) they go out of their way to ensure women are compensated equally to men, so that's not an issue, but I wouldn't say it's really all that transparent. I don't know what my "peer group" is defined as, and I don't know if the number they give me is total bullshit.
It's really hard to provide salary transparency unless you have a spreadsheet with all the variables that go into creating it -- considered a closely guarded secret at most companies. The irony of all of this is that if you provided this to people, they would likely either agree with the formula or have constructive ideas for change.
On average everyone thinks they're above average
(https://en.wikipedia.org/wiki/Illusory_superiority#Reference...)
Two people of equal value and skill will both think they're better than the other person, and thus deserve higher compensation. How do you reconcile that with salary transparency? Seems like you'll be making more people unhappy.
Would wages turn into status goods, where both of those people continuously ask for raises because in their view they're underpaid, and eventually get denied, which will probably offend them and cause them to leave?
Secondly, does this actually solve any problems that simple backchannels between employees don't? People already talk about salary at lunch breaks or over coffee; the advantage is that those are private conversations between friends, rather than your salary being broadcasted to everyone for them to judge. What problem does this actually solve?