Website makes salaries more transparent

More specific income data can help negotiate a raise. It may also hurt working relationships.

from the September 15, 2008 edition

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At the Houston consulting firm where Franny Oxford heads the human resources department, all salaries are public, so project leaders know what to charge clients. That openness has produced "no drama, but an increased focus on internal equity," she says. "People pull their weight because they know that others will question their value compared to salary if they don't. Employees push themselves to learn more or perform better so they can earn larger raises than their coworkers. So far the competition is friendly, and because we're doing well, it should stay that way."

Cissy Pau, principal consultant for Clear HR Consulting in Vancouver, British Columbia, sees it differently. "Sharing specific information about employee salary and benefits is definitely something we do not recommend," she says. "It raises issues of confidentiality and privacy, and the potential for office gossip and rumors around whose salaries are posted."

Carol Hodes of Old Bridge, N.J., knows firsthand the possible downside of transparency. Two years ago, as she was taking a buyout after 25 years with a state agency, she found a website giving data on all government employees in the state, including her agency. (Such data on public employees is widely available.)

"When I saw what some others were making, it made me feel that I hadn't been properly compensated," she says. "It particularly bothered me because I was about to start taking my pension, which is based on the average of my last three years' salary." She briefly reproached herself for not going after raises more aggressively, and she felt some ill will toward her supervisor. But, Ms. Hodes says, "It didn't take long to realize that this was a silly waste of my energy to harbor these feelings." If she were still working at the agency, she says, she might use the information "to pursue more equitable compensation."

So deeply ingrained is salary secrecy that some companies have a policy that sharing a salary is grounds for dismissal, says Mr. Gross. The Paycheck Fairness Act, passed by the House in June, would prohibit employers from penalizing employees for sharing salary information. Already California and Washington do not allow firms to muzzle workers this way.

In Vancouver, Wash., Jenn Barnes, a human resource professional, discusses her salary with others. "I do this because knowledge is power, especially for women and other minorities, and it is my legal right to do so," she says.

But rather than making individual salaries public, she and various employment specialists focus on pay grades and ranges. "If done on a wide enough scale, it could be extremely helpful in recruiting and retaining employees," Ms. Barnes says. "Companies that educate employees on their compensation strategies and publish pay grades internally as well as externally raise the professional bar. I would rather work for a company that says, 'Here is what is available to you at each stage in your career here, depending upon the following variables,' than one that says, 'We offer nothing to justify our compensation decisions.' "

So far, employers are taking a wait-and-see approach to Glassdoor, Hohman says. Calling himself "a capitalist at heart," he adds, "I don't think salaries should be equal. But they should be transparent. There are good reasons why they're not equal. Those reasons should be known." He finds it encouraging that workers between the ages of 18 and 34 are much more comfortable talking about salaries.

In the absence of full transparency, Ms. Oxford offers a suggestion, saying, "Maybe one way to look at it is that all companies should behave as if salaries might become open knowledge at any time."

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