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Great post! And the good news is that this sound advice to organizations is in agreement with "best practices" for individuals who are seeking new employment and/or a promotion - be clear about your salary requirements and have a sound rationale for them. If the orgnization is "secretive" and the individual is focused on personal financial desires rather than trying to connect to the marketplace, you have a recipe for disaster in the relationship. If both are focused on market data and the demand for particular skill sets, you can have a productive conversation about pay.

Thanks, Peggy! You're right - clarity and a sound rationale should be the baseline for both sides of the table, employee and employer.

Ann,

The differences noted may be due to several factors:

The employers were surveyed in 2005, the employees in 2007.

The employee sample was not taken from the same companies as the employers surveyed, except by chance.

A national sample of employees like this one will show employees from all types of employers---small employers and those that pay minumum wage, like fast food or retail. We know that these people will have a great interest in better pay. The surveys that HR professionals use, from major consulting firms, survey large employers and professionals, where pay is less important.

Frank

Frank-

Thanks for the comment and for pointing out some of the potential flaws in this comparison. They are worth noting, but I believe that the disconnect phenomenon is a real one - based on what I have been encountering "on the ground" in working with a range of organizations over the past several years. It might be interesting to watch for other studies with data that either supports or refutes the existence of the increasing disconnect.

Wonderful post, Ann. There are a host of issues circling this one.

We've spent so much time talking about how "money isn't the most important thing" that we've started to believe that "money isn't important." For some people, compensation is a scorecard. I think that's the driver of many super-stratospheric CEO packages.

But for most people, compensation is a hygiene factor. It doesn't provide positive motivation, but it is a negative force when it's not "enough" or "fair."

There's the issue of transparency. The generation now entering the workforce is going to push hard on that and it will be a good thing.

Wally:

Thanks for the comments. I agree, particularly with your last remark - the days of trusting a pay system because "management says so" are disappearing - if not already gone. Best we accept that fact and act accordingly!

Ann,

"And while management does reserve the ultimate right to set salaries and salary opportunities, it is best done in an open and well-explained manner."

Right on the nail on this!

When there's lack of communication, by default, people usually assume the negative. Which is precisely like you say, open communication is key!

Ray:

Thanks for reading and sharing your comment. I agree - when we fail to be open, people assume the worst.

Ann:
I have long been an advocate in my jobs and with my clients and in my classrooms of transparency in the pay system. I blogged about your blog and in it I mentioned that most people figure out what others make, and if they don't they typically inflate the figure, which is not a good thing for the company. However, many companies still have the secrecy policy on compensation, which could potentialy violate the NLRA, depending on circumstances. Thanks for a nice blog.

Michael:

Thanks for the comment! I agree that there is little to be gained by secrecy, for employers or their employees.

Thanks for introducing me to your blog as well. Readers, check out HR Observations at
https://www.omegahrsolutions.blogspot.com/

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About The Author

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    Compensation consultant Ann Bares is the Managing Partner of Altura Consulting Group. Ann has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

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