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My coworker makes what?! (When knowing more is not a good thing)

There may be yet another explanation for why federal employees have long been less satisfied in their jobs than their private sector counterparts, a new study highlighted in Slate Tuesday reveals. Researchers from Berkeley and Princeton found that workers who know what their peers make, especially if they earn below-median pay, are more likely to be disgruntled than their blissfully ignorant peers.

Some HR thinkers have argued that more transparency would lead to better motivation and overall job happiness. If that's true, federal employees, who have access to databases, public records and water cooler chatter over who makes what, should be much happier than their private-sector peers. But they're not, according to data from the Partnership for Public Service, and FedBlog's Tom Shoop wonders if a lack of pay secrets might be one reason.

One might argue, as HR gurus have, that knowing how you stand among your peers would make you motivated to perform better, in hopes of earning more. But the Berkeley and Princeton researchers argue the opposite. The study authors emailed University of California employees about a new Web site that listed the salaries of all of the university system's employees, and then followed up to see how they felt about receiving the new information. Those who made less than median incomes reported more dissatisfaction and were more likely to say they'd be looking for a job sometime soon.

But those who made more than the median incomes did not report any kind of higher satisfaction from making more than their peers. Rather, they likely assume they're worth it, and see the data as little more than confirmation of their superiority.

The study is a reminder, Slate's Ray Fisman notes, of the increasing recognition by economists that humans are actually quite social when it comes to economics. Our salary doesn't just make us happy or unhappy if we can (or can't) cover our mortgage or buy an iPad for our spouse for Christmas. Rather, we are constantly comparing ourselves and what we earn to those around us.

The study reminds me of a conversation I had with the smart behavioral economist Dan Ariely, author of the popular book Predictably Irrational, when I was reporting this story about all the pay cuts companies were exacting during the depths of the recession. He argued that while no one likes a pay reduction, they're more palatable when everyone's getting them--precisely because salary is what he calls a "positional good." "At some level you care more about how much money you make compared with other people than the absolute level," he said. "So if you reduce pay at the whole company, you in a sense keep the relative position the same."

It's hard to say what federal managers should do with the study's findings other than to look for other ways to motivate their people. But business leaders outside the public sphere who've been encouraged by HR gurus to create more transparency in their compensation systems may want to think hard about changing course. Opening up salary data may reveal truths, but doing so also has its consequences.

By Jena McGregor

 |  September 29, 2010; 11:47 AM ET |  Category:  Advice , Corporate leadership , Culture , Government leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: Why the pay gap persists | Next: Rating BP's management shakeup


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One way to motivate federal workers is to have sanitary office buildings. My friend works for a very large agency in downtown DC that has mice, rats, and roaches running around as they please.
But enough about supervisors...

Posted by: hofbrauhausde | October 3, 2010 9:52 PM

One way to motivate federal workers is to have sanitary office buildings. My friend works for a very large agency in downtown DC that has mice, rats, and roaches running around as they please. But don't worry, these feds are just so grateful that they went to school, have work experience, and now have a job that pays 1/2 of what they could earn in the private sector. Um, right.

Posted by: NCL22 | October 3, 2010 8:44 PM

Ever wonder why vampires have become so popular? Ticks, leaches, and the like have become the most successful members of our economic ecosystem.


Bitter much?

Posted by: arancia12 | October 3, 2010 12:58 PM

Great article and interesting comments. I just left the federal system due to the over-whelming dissatisfaction in the system. It is very rare to meet a federal employee who is happy in their job and feels their supervisors are even minimally competent- at least in my former agency. But those supervisors played the game to get their posts and despite what their staffs think of them, they will be there until they retire. Who in the private sector would want them? Like many others have said, many of these supervisors have lost the ability to actually do anything. In the private sector, it's a whole different set of rules and only the hard workers are rewarded.

Posted by: paula8 | October 3, 2010 12:51 PM

What is particularly dissatisfying in the Federal workforce is to see some rewarded or paid without any regard whatsoever to what the employee does. Most dissatisfying are the prima dona GS-15's who have "made it" to the top of the pyramid and who think that rules no longer apply to them, rules are for the little people, and that all tasks are menial and beneath them. They call themselves managers or directors and they are neither. If it was not for a dedicated workforce committed to excellence, they would be more obvious to the outside world. They give all of an agency a bad name and make Government employees look bad. They would die if they were ever made to do anything or if they were held accountable (where they could not delegate the accountability downward).

While this is probably a little deeper than the article's subject; that is, knowing what your co-worker makes. What folks make is important. However, what is demoralizing in the Federal workforce is that we have so many of these arrogant prima donas at the top of the hill dictating us all right over the cliff.

Posted by: OlafGunderson | October 3, 2010 10:28 AM

What others make is not your concern. This is part of the problem with society today, people are more interested in other people's business and trying to control it rather than dealing with their own situation. I guess in the government where you do have placeholders making $100K or more a year it can be difficult to deal with but in the end it is not your problem.

Posted by: Pilot1 | October 3, 2010 9:24 AM

Dissatisfaction is tied to several factors. As a retired employee, I can attest to most of them. Supervisory bias leads the way in performance ratings and awards. These mean $$$ in your pocket. In addition, promotions are tied to these factors along with the attention hiring managers pay to Agency hiring goals, e.g. minority quotas (without that name).

I can state that standing there seeing another employee promoted or rewarded is extremely frustrating and disturbing. Expecially when you know that you are better educated, better qualified, and have consistently performed at a higher level. My record speaks for itself. After 5 consecutive years of outstanding performance ratings, I kind of gave up and slipped to a superior. Guess what, that was the year (and the only time) that I ever received a performance award! Go figure!

Posted by: Corn-Cop | October 3, 2010 7:33 AM

So many thoughts here, some related to the subject, some maybe not. My father-in-law worked for years as a mid-level technical guy for the government. He made many presentations to folks in the private sector, and knew from conversations that he could nearly double his salary in private industry. More transparency than the private employers probably wanted, but it was there. He chose to stay with the government because the private jobs required relocating to larger cities. Not his style, I guess. But he did rise to the highest pay level he could obtain without a four-year degree, did retire after nearly 40 years and was able to live comfortably. He seemed quite happy to me.

I worked for a large manufacturing corporation, in a non-salaried role. My pay was negotiated, and thanks to the media, and with cooperation from management, everybody in the world knew what I and those around me made. Got to have a villain, right? Contrary to management's wishes, in the salaried areas there was a lot more transparency than was designed into the system. People talked, people bragged, people complained. And please, don't talk to me about merit pay! Play golf with the boss, date one of the honchos, whatever...certain actions would trump merit. Always has been this way, always will. Performance can be defined many different ways.

Performance pay? Glad I didn't have to deal with it, even if the whole world knows, or thinks they know, what kind of money I made. I'm retired and happy.

Posted by: rtinindiana | October 3, 2010 2:42 AM

the problem in government are the political appointees....

Posted by: Rockvillers | October 3, 2010 12:52 AM

When they start going postal we'll know they have a real problem with the system. Until then they are just whiners that know they're lucky to be suckling from the taxpayer, just not as successfully as others.

Ever wonder why vampires have become so popular? Ticks, leaches, and the like have become the most successful members of our economic ecosystem.

Posted by: jwherman | October 3, 2010 12:35 AM

I worked for the Federal Government for 30+ years.

Because salary in the Federal Government is based on grade and time in grade, there was little turmoil over salaries themselves, but much turmoil over unfair ratings by supervisors.

Supervisory ratings could result in "outstanding" pay or an extra "step increase" which increased pay and retirement pay (which is based on high 3 years of employment salary).

Ratings were supposed to be understood, quantifiable, verifiable and fair.

Supervisors often spent little time on the rating system, explaining what was required or tracking employees's actual work, and rated based on personality at the end of the rating period.

Employees often had to file grievances to get recognition for their work.

As bad as this is, my experience with salary & benefits from private industry was far worse. Everything, from salary to ratings, working conditions to benefits and rewards, were based on favoritism.

As bad as the Federal Government system is, Private Industry is worse.

Yes, some private industry pays more than the Federal Government, but I watched those high salaried employees come, stay a few years at most, live high, and leave, while I made it 30+ years with the same employer, with retirement, benefits, and good working conditions.

There is a lot to be said for security, health insurance, benefits & retirement.

Posted by: SCVoter | October 2, 2010 11:10 PM

The government workers that I've talked to are pretty happy. They don't have to worry about their jobs being outsourced or laid off, they've got great insurance, and the pension plan is better than the private sector offers.

What the private sector has to offer is stress, fear, and no future.

Posted by: camera_eye_11 | October 2, 2010 10:01 PM

The hard part of working for the government is the government itself. Change is not allowed and policies and procedures written 40 years ago are still in place. Being stifled and micro-managed are more important issues than salary, at least for me.

Posted by: naw480 | October 2, 2010 8:23 PM

Sorry, but in most work places, people figure out pretty quickly what others make, and if they are already unhappy with their job, they will start to fixate on the money.

The only difference n civil service, is that each job is assigned a salary range that is public, knowable and related to the job's characteristics. If you disagree with how that assignment happens, at least you knew about it when you signed up. When my husband sees that an engineer with less experience than he has starts at a GS 13, while he is pretty much capped at a GS 12 as a technician, he at least knew that up front 25 years ago, and it is his choice whether he wants to go back to school and be and engineer or stay in his current position.

If people want to whine, they're gonna whine. Civil service rules are at least somewhat fair compared to private industry.

Posted by: dolgre | October 2, 2010 2:10 PM

@incredulousinBoyntonBeach I wish I were as lucky as the person you're describing! Wow, they should seriously count their blessings. I've done the best I can and will never come close to that -- either in salary or in retirement benefits. Those retirement benefits sound absolutely fantastic.

Posted by: AnonyMiss | October 2, 2010 12:27 PM

My apologies to Nubi, my post should have referenced CJDB.

Posted by: arancia12 | October 2, 2010 11:27 AM

One of my pet peeves is when people say things like "I didn't have to do this job. I could have had a job that paid better!"

Then go do it and quit whining. Incredulous and GOPNUBI, you made your choices. If either the Fed employee of Incredulous's post or Nubi him/herself were not happy in their employment then find they should find something they are happy in.

This is why focusing on salary is so harmful. Nubi, want 24k a year in retirement, should have joined civil service. Incred, your guy want more than 24k? Should have joined Haliburton. Perhaps this constant focus on what you wish you had is why so many people are unhappy.

Posted by: arancia12 | October 2, 2010 11:24 AM

The article misses a key point of potential unhappiness in being a federal employee...the fact that progress is based more on seniority than meritocracy. Of course, I would be unhappy being an employee who works hard, but makes less money than someone who gets paid more by just being around longer, or having had the opportunity to get some unnecessary part-time masters that adds no value, but pushes them up the federal pay grade. I have peers in the public sector on both sides. Some of them love being there because they admittedly do a half-hearted job and have no fear of recrimination. Their highlight of their career is sticking around long enough to get some sort of special desk. I am not kidding. The other friends in the federal government recognize they get a decent deal at the end of the day, but get very upset about the lack of motivation in their peers. They do not want their pinnacle achievement be a special desk when they hit 45 years old.

I have some teacher friends who run into a very similar problem. When you provide tenure and apply rigid payment scales that reward seniority without merit it drags the entire environment down to the lowest common denominator. The end result is a depressing workplace, disgruntled employees and mediocre work.

Posted by: gopnubi | October 2, 2010 10:15 AM

Actually, $24,000 (net) in pension after only 20 years in a job - a job in which the family had full insurance coverage and absolutely regular paychecks for putting in what probably were quite regular, relatively limited hours - sounds wonderful to me. (Given the tone of IncredulousEtc's litany, I'm pretty sure that notably long workweeks would have been mentioned.) I am *not* saying, "that sum is princely, it's too much" - and I'm sure that the worker described did a fine and honorably good job during his tenure - but, to me, having labored 33 years so far in a small business that has seldom needed less than 60 hours (usually more) and can promise no pensions - well, "dripping" bitterness seems to me to be misplaced, in contemplating that $24,000.

Posted by: CjDB | October 2, 2010 9:21 AM

Oh, yes, the retirement benefits for those fat cat Federal employees are great, she says with dripping irony.

I know someone who worked for the Federal government for 22 years, in a very high-responsibility position, making over $140,000 a year nominally (more than half of which disappeared from his paycheck because of miscellaneous deductions, including state and federal and local taxes, retirement premiums, health care premiums, etc.). He retired at age 60 (which was "full retirement age" for someone who worked there more than 20 years). His wife didn't work for the Feds and her job didn't offer retirement health care group rate coverage, so in order for her to be able to buy health care at the Fed group rate in the event he predeceased him, he had to forfeit a substantial chunk of his retirement annuity (basically to buy her a survivor's annuity of $6,000 a year in the event he died first) and so his annuity was -- ta-dah! -- a whopping $1,900 per month (less than $24,000 per year), after deducting his Blue Cross monthly premium (family plan so his wife could be covered) which is $400. a month.

Yeah, great retirement plan. Wonderful.

Imagine what the lower-paid "regular" Federal workers get when they retire.

Just keep bashing those Federal workers.

Posted by: incredulousinBoyntonBeach | October 2, 2010 7:43 AM

Clearly, the public sector unions and legislatures/town councils DO NOT buy into the saying, "Money can't buy me love." Given that, relatively and generally speaking (excepting fire departments and law enforcement; and,no, not the corps of engineers), public sector employees do not produce anything except headaches for the pivate sector. Consequently, they must receive the higher earnings. But ask yourselves, given that public sector employees' salaries/wages are deriverd from taxes (yes, I know they pay taxes, too), how many private sector jobs are needed to fund one average public sector job?

Posted by: BeanerECMO | October 2, 2010 7:38 AM

I bet the same kind of thing is true of other "motivation" HR and management comes up with, e.g., awards for "top-performing" employees. (Fortunately there's not a whole lot of emphasis on this kind of stuff in the company I am in.)

Posted by: cmckeonjr | October 2, 2010 7:12 AM

Jena, good article.

Public workers should stop moaning, and just be thankful that they still get paid even though the organization they work for is losing over a trillion dollars a year. No private sector worker has an employer who would keep them around sustaining such losses.

Posted by: tgt111 | October 2, 2010 4:52 AM

The Post needs to update their Federal employee database, it's eight years out of date.

Posted by: PowerBoater69 | October 1, 2010 6:29 PM

Someone's scenario about being hired during the down economy and someone coming in later at the higher salary is exactly what happened to me. My second year on the job a new contract was negotiated and new hires were coming in at the same I was now making. And yes it pished me off. But it was not their fault, nor mine, and in this case not even my empoyer. Just the luck of the draw, and down the road I still have seniority on them so that counts for something.....

Posted by: John1263 | October 1, 2010 6:25 PM

There are two things that make government owork - from routine bureaucrats fto teachers first responders and cops have to get job satisfaction, because the pay compared to the private sector- as this points out -- sucks. First, you know you are doing something worthwhile. If you are making the email work, or designing bomers to kill brown people or designing software for insurance comapnies to helpe them rip off their customers you may make alot of cash but you know deep inside that you are worthless to humanity.

The second thing is the relatively stable retirement benefits. That teahadis are trying to take that away is a disgrace. People who work their whole lives for little recognition and crappy pay to do the things that make society run and these conservativescumbags want to stel their golden years too. That ashwole cristie in NJ is destroying the public schools, but last week he announced that contrary to his often repeated line to firefighters and cops that he PORMISED he would not touch their pensions, he is planning to do away with their pensions entirely and give them a stock market based retirement. Typical teahadi conservative lying piece of dog pooh skrewing working people so he could avoid a one time 2% tax on millioniares in NJ - a tax that would have affected only 16,000 residence of the state for one year to balance the budget. Let hundreds of thousands of faithful public servants suffer so millionaires don't have to give up that 8th Porsche.....

Posted by: John1263 | October 1, 2010 6:22 PM

In my first job out of college, I found that I, a married woman, was being paid less than my single colleagues. I complained to the department head, and my pay was corrected.

I do think that full disclosure is best, because that is the only way that women are going to be fairly paid. The last time I asked for a raise, and my boss' response was that I should have asked for more money from the outset. Studies of hiring practices have shown, however, that when women do this, they are likely to be viewed as troublemakers, perhaps even having a job offer withdrawn, as had happened to me during an earlier job search, while men are likely to get the additional money. I would add that after I left a subsequent position, I was recommended for a job paying twice what I had previously made. My work had been worth that much all along, but the powers that be didn't realize that until I was gone and those for whom I had been covering were exposed.

The public sector is not alone in blindly rewarding additional years of experience that may or may not have additional value. That is one of the reasons why women, and, in particular, women who have taken time out of the paid workforce to care for children, are often underpaid. And yes, I've heard all of the arguments about how businesses would surely hire women over men if they could really do the same work for less, etc., but, as we all know, those hiring tend to favor persons like themselves, and those in power are still mostly male.

Posted by: CMNC | October 1, 2010 9:11 AM

Here is a funny question. We're currently in a down economy. Suppose someone is hired now and is paid a low starting salary. Now suppose that in a couple of years the economy has picked up and it's a tighter labor market and someone new is hired at a higher salary. Now, these two people who have the same job title (for sake of argument) and relatively little difference in experience are getting different salaries.

Next, imagine that a few years go by and the information is posted in the company. How is the first employee going to react to the knowledge that she's getting paid less (maybe significantly) than her coworker for doing the same job? Should HR now increase her salary to the same level as her coworker? If so, then how does the coworker feel if it looks like she suddenly gets a large raise for doing the same work (even if their actual salaries are now even)? That is, what are the social dynamics?

Posted by: abecedarian | September 30, 2010 1:11 AM

Back in 1996, I interviewed Gloria Steinem for an article in the WSJ entitled "Something to Talk About: Do You Know What Your Colleagues Make?" Steinem strongly advocated for full disclosure on the grounds that only full disclosure can assure the absence of bias (at least with regard to compensation) in the workplace.

I'm pretty much of the same view. With public companies there's mandated disclosure of who makes what -- at least for the top five execs. The real inequities are in private companies that rake huge profits into the hands, sometimes, of a single individual and his/her family.

Posted by: armar | September 29, 2010 11:45 PM

The writer may not know that the National Labor Relations Act generally protects the right of private employees to talk about their wages among themselves. So while employers may not want to post wages for all to see, policies preventing them from sharing information may lead to problems.

Posted by: mamiejane | September 29, 2010 5:23 PM
So you take it out of the Employee Handbook and say nothing. Problem solved.

I always thought this should be posted along with the Minimum Wage, Overtime and Discrimination information. Employees do not have Lawyers on retainer, Corporations do. It astounds me that Governments at all levels commit such sins of omission. Are Businesses going to stop paying taxes if the Government is won't help them keep employees ignorant ?

Posted by: gannon_dick | September 29, 2010 11:05 PM

I am on the opposite end. I am the one in the office on the higher end of the junior skill. I started a few months ago--and everyone is staring at me---to figure out why do I make more than they.

It is very uncomfortable. I know my skills are unique---and for my field I am paid on the low end. But to them--I am making more than them--and they are tallying up metrics that are not quite apples to apples comparison.

It sucks. Because I have to thread lightly--my coworkers wants a project so she can showcase her skills--I better find a way to make that happen. At times this is directly in my job description but sanity in the workplace has its price.

Posted by: CultureClub | September 29, 2010 10:57 PM

Hey, Jena.

The problem with the research you cite brings to my mind a quote from Mark Twain: "There are lies, there are damn lies, and then there are statistics."

You erred in looking to the research on government-funded jobs (of which I'd lump academic ones, having been an academic in a previous career) and then trying to extrapolate from this domain, which doesn't have a strong tradition or track record (amazing understatements!) of recognizing and rewarding employees based on merit. Rather, seniority and/or tenure is a much more significant driver of compensation in this domain.

Many folks have a problem with this philosophy or system: for example, imagine being an up-and-comer who's widely (but sadly, only informally) recognized as adding much more value to the organization than the "average bear," yet earning less than the median due to structural and cultural constraints around compensation.

In meritocratic organizations, employers are much better off being transparent about pay. If such employers pay someone significantly less than the median for the same role, then they had better be very comfortable and confident in the belief that this individual is, in fact, creating less than the median value in the organization. If said organizations are paying this type of individual less because (a) she's a she (not a he) or (b) s/he hasn't "made enough noises in the past about leaving" compared with others or (c) take your pick of completely irrelevant/invalid reasons for paying someone less than s/he deserves, then I am rooting for that individual to discover this pay inequity and to move on to greener pastures, for an employer who recognizes his/her worth and compensates accordingly.

In short: ignorance is bliss only if you're cattle on your way to the stock yards. For everyone else, especially in allegedly meritocratic organizations, transparency is a good thing: organizations are compelled to think carefully about how they recognize and reward their employees, lest they demoralize and repel the brightest and the best, and employees can make a fact-based rather than rumor-mill-based choice about whether they are rewarded as they believe they deserve...or not.

Posted by: soonerfan | September 29, 2010 9:59 PM

OK, I'm a bureaucrat. I understand unhappiness about how people do at work, that some people get better jobs, higher levels, better offices, and it often is based not on performance but on who you know. This makes bureaucrats a frustrated group. We are ready to be frustrated and unhappy by similar information that confirms our fears and dissatisfaction with the job.

That said, I think it is a sampling error to measure government employees in a relatively non-merit-based environment, and say that this provides insights to a more competitive, private sector environment. The issues are different, the rewards, atmosphere, etc don't apply.

In the UofC or other similar organization, we have access to the pay scales. We can find out what the guy next door makes. This is not the case at Megacorp Inc. At Megacorp, you really have no idea what Bob in the cubicle next to you is making. Would it be better for the company in terms of your performance if you knew? I have no idea - but I don't think a study of us bureaucrats is going to tell you.

Posted by: harkish | September 29, 2010 9:46 PM

a long time ago when I was working as a contractor for a federal agency, I went out to lunch with one of my fellow workers...
we started talking about salaries and when he told me how much he made, I started laughing and could not stop...
they were really really taking advantage of him...
I stopped laughing short of him beating the crap out of me...
I advised him to look for another job and ask for more...
which he did...
for the same job I was making double what he was making...

Posted by: DwightCollins | September 29, 2010 8:35 PM

Secrecy makes it easier for the employer and helps to ensure that the employer need not rationalize salary policies nor relate salary to positive results and/or tenure more than loosely.

So many things can affect pay: economic conditions when the employee is hired, how assertive the employee is, tenure in the job (not always rewarded), salary levels for a specific occupation, regional pay differences, value or perceived value of the employee, office politics (often a factor, sadly), and-- illegally-- prejudices based on gender, race or age.

In all honesty, it is easy to see why it may be difficult to rationalize a pay system. But while secrecy is expedient for employers, that does not mean that it is a good thing. It does behoove employers to develop reasonable pay systems that protect employers and employees alike. As well, such systems should be safeguarded by manipulation on the basis of favoritism, office politics, and so forth.

Posted by: ANetliner | September 29, 2010 7:32 PM

I left my good paying job at the same time my sleazy male coworker was "laid off." I was better educated than him and had held higher level positions in previous jobs and had more experience. He was a greasy dirtball who got caught dipping his pen in the company inkwell and they laid him off rather than fire him because everyone liked the little kisser.

On his way out he asked me how much I made so I told him. Then he said "Oh, good, I made more than you." And he did.

The federal division I joined hired him later although he lied on his resume.

I was dissatisfied with my previous company and glad I made the decision to leave and join the feds. I was really dissatisfied when my fed boss hired him. Bet they started him off higher than me.

Fortunately for me I continued my education and because he's a non-degreed slimeball he can never follow me in my new career.

Posted by: arancia12 | September 29, 2010 7:23 PM

"This is nothing new. Many years ago, the Diamondback used to publish all the salaries of UMCP and UMUC employees once a year. We were not happy, especially when we saw that someone with no degree was making more than the dean--at a university. Though the info is public, knowing it still disgruntled all ofus."

LOL aside from the fact that what you're describing is incredible, how could you possibly know the educational background of anyone on that list unless it had been published in a public medium. If they don't have any degrees that is hardy something that you'd find out online unless they disclosed that information themselves.

...and in any case you might not be happy about it but there you go. You don't need a Ph.D to make a lot of money. Amazing.

Posted by: tokenwhitemale | September 29, 2010 7:12 PM

...there's a subtle disconnect between the fact that the workers aren't necessarily happier knowing what they earn relative to their coworkers, and the conclusion that it's a good idea to keep that information from them.

Questions like "why is it a good idea, and for whom" are all answered from the companies' viewpoint. So you think that will stand up in court when women find out that male coworkers are making 25% more for the same work?

Posted by: tokenwhitemale | September 29, 2010 7:08 PM

In Norway everyones salary is online on a government website. It's not taboo. In the US it's taboo to talk about wages so when we do it's a big deal. And when we are offered a job it can be that much harder to compare to others in a very similar position. If our wages were out there and posted all the speculation and gossiping might stop?

Not sure but just a though.

Posted by: lkos316 | September 29, 2010 7:05 PM

{snip}The study authors emailed University of California employees about a new Web site that listed the salaries of all of the university system's employees, and then followed up to see how they felt about receiving the new information.{snip}
This is nothing new. Many years ago, the Diamondback used to publish all the salaries of UMCP and UMUC employees once a year. We were not happy, especially when we saw that someone with no degree was making more than the dean--at a university. Though the info is public, knowing it still disgruntled all ofus.

Posted by: bucinka8 | September 29, 2010 6:11 PM

Secrecy is almost never a good thing. Employers drill home the taboo about discussing salaries because there would be insurrections if workers knew what their peers – especially those in upper management – made. Those figures also should include any fringe benefits, which become increasingly obnoxious at the higher levels. Federal workers have no reason to be upset because they know what their co-workers make. If they don't like the pay scale, they should work in the private sector instead – and enjoy being paid less and kept in the dark about it.

Posted by: SandwichMan | September 29, 2010 6:10 PM

You seem to have dropped one important piece to this puzzle and that is, how produtive are these workers as judged by co-workers. If a comparable employee is seen jawing on the phone to friends and accomplishes less, you will resent it even if that person makes the same wage.

Posted by: michael5 | September 29, 2010 5:55 PM

Secrecy about pay in private companies is entirely about suppressing wages. You can rationalize that secrecy is necessary for a harmonious work environment. However, that is just cover for not having to justify wages. If wages are unfair, then workers must know in order to correct the unfairness. Of course, the greatest secrecy is about what the CEOs and owners of the companies make. The theory of markets is that people should have the infomration they need to know if an exchange is fair and in their best interests. Not knowing everyone's share in the distribution of the income of a company makes it very difficult to act rationally.

Posted by: jessechanley | September 29, 2010 5:55 PM

I think this is just an argument for managers to make salaries meaningfully tied to performance. People making more than the median *should* be better workers than average, and, if they are, it'd make sense that they know it. People who are making less than the median should be able to see a path to improving their performance and thus improving their pay, and they can decide whether to strive for that or just be content with working less hard and making less money.

Of course, the system doesn't work that way at all at most places. And it makes sense that it's demoralizing when people realize it doesn't. But just trying to keep everyone ignorant about salary is the lazy way out on the part of management and HR.

Posted by: clarkjerome | September 29, 2010 5:49 PM

This should have been common sense to just about everyone in HR. In fact, it was one of the first lessons I ever learned in the "real world."

Hiding salary information is also a great tool for HR to use to keep salaries at a firm low, or get people to start off on the lower end and keep them there. I like to term it "controlling costs."

Posted by: habari2 | September 29, 2010 5:26 PM

The writer may not know that the National Labor Relations Act generally protects the right of private employees to talk about their wages among themselves. So while employers may not want to post wages for all to see, policies preventing them from sharing information may lead to problems.

Posted by: mamiejane | September 29, 2010 5:23 PM

If, as happened to my daughter, you discover that another employee in your same position but with lower performance ratings and less time in the position is about to jump you in pay due to a quirk in how raises are computed, you will indeed be dissatisfied. The HR person managed to blame the formula, but the bottom line was still man being paid more than woman.

Posted by: abbyandmollycats | September 29, 2010 5:04 PM

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