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Tuesday, May 13, 2014
Should You Tell Others What You Earn?
Over the years there has been great discussion about whether companies and employees should be more transparent over salaries.
The latest salvo in this discussion comes from a Tel Aviv University and Cornell University study that finds pay secrecy can hurt individual performance.
Why? Because if employees don’t clearly see that better performers earn better paychecks, then they don’t understand that they need to work harder. In addition, top performers may be more likely to leave if they don’t understand that they’re earning more money because they’re seen as valuable, researchers say.
Despite such studies, most companies don’t want workers talking about how much they earn. For one reason, it’s easier to gain the upper hand in salary negotiations if employees are in the dark about what others are earning. For another, they fear it will damage morale and lead to spats among workers and create headaches for managers.
But Edward E. Lawler III, the distinguished professor of business at the University of Southern California, Marshall School of Business, has argued for years that leaving workers (read more here)