Three issues against the confidentiality of salaries
Credit to Author: Rey Elbo| Date: Mon, 25 Nov 2019 17:06:35 +0000
LAST WEEK, a reader asked me a question on how to deal with a nosy office colleague inquiring about his salary. His nosy friend was apparently joking while trying to test his patience. If he’s joking, then this is what you should tell him: “Bloat your salary by as much as 50 percent and let him be green with envy.” You may be perplexed. How could a business journalist like yours truly prescribe a dishonest answer?
That’s because you would like to get back at people who have no business knowing your personal data, with or without the law on data privacy. How about if your dear 75-plus year old auntie comes to you and asks how much you’re getting, then what would be your answer? Put on that humble face and come out with the most realistic lowest figure you can create.
I’ve been in human resources (HR) field since 1981, long before the enactment of the data privacy law, when I was told by my boss that salaries must remain confidential within the organization and much more to outsiders. I was told not to allow our workers not to compare their pay and perks, even if it’s beyond our control. At least, that’s what you can do under the circumstances. But why make salaries confidential?
That’s because people would never be satisfied with what they’re receiving no matter how the organization tries to maintain an objective salary scale galvanized by an annual industry survey. Still, some people would not accept the fact they’re receiving less despite the many explanations by HR. Now, imagine if you allow people to open up and compare their pay slips.
Today, it has become easy for HR to invoke the law on data privacy. And that’s it. But at times, you’ll meet workers who are creative to challenge such age-old management policy. Otherwise, the result would be chaotic. The HR department and top management would be saddled with everyday complaints.
This does not mean, however, that aggrieved people are prevented from raising a howl.
They can always seek redress with their respective bosses, if not with the HR department.
And if they’re not happy, they can go elsewhere for the proverbial greener pasture. As a last resort, my boss used to say to our persistent but unproductive workers:
“If you’re not happy, then the door is wide open.”
Since time immemorial, with or without the law on data privacy, I maintain the belief that pay and perks of people are confidential. Divulging it to others can create big trouble than what you can imagine. Sure, there are certain drawbacks to this. “While it may seem like good sense to control company finances absolutely, keeping your employees in the dark is a large blow to morale,” said Charles Towers-Clark in his 2018 Forbes article “Why Do Employers Keep Salaries Secret?”
That’s why you should not keep employees in the dark. At least, you should give them a general understanding of the company’s compensation policy, without touching a specific, individual’s case. In recent days, my position on this age-old issue was challenged by some people via an HR page on Facebook. Let us analyze the pros and cons on why salaries remain a touchy subject:
Issue No. 1: Keeping salaries confidential is a ploy designed to keep it low.
My take: That “ploy” will not hold water in our society where practically everyone would want to job hop in search of the greener pasture. This is not Japan where lifetime employment is a much-treasured corporate value. If the workers are not happy, they can take revenge by looking for a higher pay and perks elsewhere. If that happens, employers would be unhappy for they’ll have to spend more for their replacement.
Karlyn Borysenko, principal of Zen Workplace, estimates the annual cost of turnover as within the range of 30 to 50 percent for entry-level posts, 150 percent for mid-level employees, and up to 400 percent for high-level or highly-specialized employees.
Issue No. 2: If people knew they’re getting less, they would also work less.
My Take: I beg to disagree with this simplistic thinking. I believe in the goodness of people including the minimum wage earners. They would work hard because they want to protect their jobs. For many of them, it’s better to have a job than nothing at all. Besides, working less is difficult to hide where organizations have a strong and robust performance appraisal system.
Dead woods know they can’t hide away from their people managers who are required to meet their own key performance indicators in a dynamic organization.
Issue No. 3: There are already many online discussions about salaries.
My Take: One person who supports transparency of salary recommends “Adam Ruins Everything― Why You Should Tell Coworkers Your Salary” on YouTube. The trouble is that salary discussions in the internet are not the scientific approach to determine the best price for a particular job. The best way is to hire an external expert who could do job evaluation, pricing of salary scale, and the conduct of an industry or benchmarking survey.
Besides, there are many factors to consider. And that includes one’s educational attainment, work experience, length of service, and the meritocracy policy of the organization, among other things.
If you have seen the video, try to copy the style of Adam in leading the war against secrecy of salaries and let’s find out how it would go in your organization. I will be interested to know the result.
In conclusion, despite all of these persistent calls for transparency, one must understand the fact that the hands of corporate management and HR are tied behind their backs.
Baptize them with bad names or whatever. You can even body shame them. Whatever you do, you can’t force management to reveal the salaries of your colleagues, much more the amount of tax shield that your bosses are enjoying.
But what if the one asking is the legal spouse of the worker, would the confidentiality rule still applies?
Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to elbonomics@gmail.com or via https://reyelbo.consulting.