High on the list of my least favourite tasks are buying a car and negotiating a salary. Both leave me wondering if Ive been had.
Of the two, car haggling used to be worse. If they are willing to sell it to you, my father always said, youve paid too much. But in recent years, with Edmunds.com and Consumer Reports to tell you what the dealer is paying, and companies like Saturn, where the no-haggle rule means the price is the price, some of the migraine-making elements of the process are gone.
More recently, there are signs that salary negotiation is inching toward greater transparency, too.
I believe the momentum behind salary transparency is really beginning to build, said Traci Fenton, the chief executive of WorldBlu in Austin, Texas, which coaches companies on the creation of more democratic workplaces, and which practises what it preaches. The 11 employees at WorldBlu, most of whom work on contract, all know what one another are paid.
Openness about company ledgers will become the norm, Fenton predicts, even if people come to it reluctantly. If people are paid what they are worth, there is no reason for them to feel uncomfortable about sharing salary information.
The openness looks a little different at Motek, a company in Beverly Hills, California, that develops software for warehouses. Employees at the same level receive identical salaries, and raises are negotiated for the entire team. Every one of my employees knows every other employees salary, from the receptionist right up to the software engineers, said Ann Price, the chief executive. Theres no comparing or jealousy or backstabbing.
Some salaries have long been public knowledge. Government employees know what colleagues take home, and that information is available to outsiders, too. Nonprofits must list salaries when applying for a grant. Hourly workers, particularly at entry level, frequently know what colleagues make. Pay for those at the top of organisations, particularly publicly traded ones, is also often no secret.
For everyone else, however, paycheck specifics are shrouded.
Its a very American, very middle-class phenomenon, said Ed Lawler, director of the Center for Effective Organizations at the Marshall School of Business at the University of Southern California, who has studied salary transparency since 1962. The way we were raised is that it was bad taste to talk about how much you make.
Our pay tells people what others perceive to be our value, he added, and we worry that we will fall short.
Lawler has found that most people carry a mental image of where they stand in relation to their fellow workers. Significantly, he said, that image is likely to be wrong. We underestimate what those in positions above us make and overestimate what those in positions comparable to ours make — a surefire recipe for feeling underpaid.
So is the answer for every workplace to tell all? Penelope Trunk thinks so.
Last month, she started a flurry of debate on her blog, The Brazen Careerist (penelopetrunk.com), with a post advocating salary transparency (and in which she conceded that she hadnt yet laid the groundwork for such a policy at her company).
Her logic was that secrecy about salaries masks inequity. What you are paid should reflect your worth to your employer. Companies should have a range of pay for any given job, and if a worker is at the low end of that range there should be a reason.
Instead, Trunk wrote, what you are paid more often reflects what your employer can get you for. Skilled negotiators earn more. Employees who are more personable or favoured for intangible reasons earn more. So do those who were hired when the manager was either desperate or flush. That results in a salary scale that makes no sense, and leaves many feeling cheated.
Take the employee response at two companies where salary information accidentally became public.
A few years ago, Laura Harris, whose insurance business in Corpus Christi, Texas, has six employees, was taken by surprise when the company that does her payroll faxed a list of salaries to her office without a heads-up. An employee found it and showed it to her colleagues.
Harris had concrete reasons for everyones pay. Those that make the most money for the company are given the salary increases, she said. Longevity doesnt pay my bills, nor earn raises. I have had people with seven years with my firm that made more than someone with nine years.
Some employees were none too happy about the revelations, Harris said, but not a single person complained.
Things did not go so smoothly three months ago at the Golden Lasso, a marketing agency in Seattle with 15 employees. Thats when someone took a stack of payroll slips off the printer, then shared what she had learned at a get-together away from the office. Philip Swanstrom Shaw, the agencys creative director, was soon facing an agitated employee. She wanted to know, he said, why she wasnt making as much as someone else.
I had to tell her that her job description was different, and we were still grooming her and developing her potential, he said.
While trying to diffuse her anger, Shaw realised how much his agencys salary structure was based on intangibles. We dont pay as much as others in the area, he said, but we emphasise quality of life and not working every weekend like some of our competitors, and keeping jobs safe even in a downturn. That was hard to quantify.
He understood as he spoke, he said, that some of his explanations sounded hollow. The employee who revealed the salaries has since left. The employee who complained has been given a raise, and the whole incident was poison and we are still dealing with it, Shaw said.
Secrecy favours an employer in hiring. It can be difficult for potential employees to know if an offer is fair if they are blindfolded. In the absence of widespread transparency by companies, websites are filling the gap.
Information is good and more information is better, said Robert Hohman, a founder of Glassdoor.com, which started in June. Glassdoor allows people to anonymously post salary information, making it one of a growing number of websites that list salaries by specific company rather than by general job description.
Hohman compares his venture to Expedia, the travel website. Before the Internet, he said, only insiders had access to the entire range of prices and schedules of airlines and hotels. Now everyone can have it.
Eventually, he hopes, an employee will be able to go online, click on the name of his or her company and see the range of salaries for his or her type of work.
Because salary information on such sites is posted anonymously, he warns, they cannot single-handedly change the culture that makes that anonymity necessary in the first place. Telling others what you earn will probably always be tricky, he said.
But some people are already defying the taboo. Price, for one, was happy to tell me that her salary is $300,000. Her project managers earn $80,000.
But when I asked Hohman, he stammered, then answered: $200,000. Later, he sent an email message to say he had done something he had been procrastinating about: post his salary on his own website.
And Lawler? I asked him, too, but, fully aware of the irony, he said he couldnt tell me. I could lose my job for that, he said. USC policy is that we cant reveal our salaries.