An age old theme in human resources management is the quandary over disclosure of compensation information to all employees and candidates. There are several good reasons to have open communications in building a culture of collaboration and cooperation. There are also several reasons to guard this data as if it were the gold in Ft. Knox. Pick a side and argue your point… but HR Professionals are always in the middle. If there ever was a classic case of “damned if you do, damned if you don’t†this is it. Either way takes all the professionalism and courage that can be mustered up by a staff function that is always on guard to protect not only the image of the company brand but also to offset negativity in the common public dialog against HR in general. There is no Society for the Protection Against Cruelty to HR Peeps… well, maybe SHRM.
The Do-It Discussion
- It maintains an environment of trust and fairness when a company is confident enough in their salary administration process to open the kimono and expose it all.
- Openness in sharing salary information offsets the rumor mill that will guess at answers to curiosities and often come up with the wrong answers.
- Employees will discuss salary information among themselves anyway.
- The National Labor Relations Act says that employers cannot prevent employees from discussing wages and the NLRB has reinforced this concept as justifiable so that employees are free to organize.
The Don’t Do-It Discussion
- Publicly revealing proprietary company financial information gives a leg-up to the competition in terms of both strategic planning and poaching key talent.
- Most HR departments are not staffed to resolve pay grievances or salary disputes other than to quote “policy†or escalate to a higher authority.
- Regardless of how much a company pays its employees, the perception will always be that it is not enough, especially in light of disclosed executive compensation.
- The maturity level of people regarding money and the jealousy of others who make more money is a characteristic of human nature and will never go away.
While my intellectual preference is full disclosure, more often than not situations have steered my thinking more toward the frustration of handling disclosure to a bunch of immature employees who can’t handle the truth about compensation. Idealists will argue that this is a situation that can be handled by skilled professionals, but a degree in HR does not qualify a person to psychoanalyze an employee’s childish motivations and fix them. Unfortunately, the time that it takes to do it right is usually a luxury and the final solution is not to fix the problem but to hide under a cloak of secrecy. An interesting aspect of compensation in most non-disclosure companies is that HR professionals have visibility of everyone’s salary… except their HR colleagues. Even HR doesn’t trust HR to be objective.
We live in an environment where everyone aspires for wealth but is critical of the wealthy. Millionaire Democrat presidential candidate John Kerry was criticized by Republicans as being a wealthy elite snob who was a tax dodger. Millionaire Republican presidential candidate Mitt Romney was criticized as being a wealthy crook that fired people. The logic behind this is faulty even to those who spoke those words, but it is indicative of how people can be convinced of right or wrong when there is an appeal to their base instincts. CEO’s make a lot of money. If they made less there would not be a redistribution of the difference to the rank and file, so when will we ever get over this? It is unhealthy for objective thinking and unhealthy for business.
Image Credit: A Few Good Men © 1992 Columbia Pictures, one-time non-commercial use in context of quoting movie dialog qualifies as fair use under United States copyright law.