Pay secrecy is likely to undermine the sense of pay equity or pay fairness in the organization,” — Rousseau.
Why You Should Talk About Salary With Co-Workers, Even If Your Boss Forbids It
It’s your right. And there’s a reason higher-ups may not want you to.
Many people consider talking about money tacky or even taboo. That’s especially true at work, where knowing who earns more or less in the office can create an awkward vibe.
But is there ever a good reason to bring up salary with coworkers? Yes, and it could be crucial to both your happiness at work and your bottom line.
Making salary information public has its pros and cons.
Some companies take the opposite approach, making salaries completely transparent across the organization. Usually, salaries are based on some sort of formula that ensures pay levels are fair. This model has a few benefits for the employer and employees.
For instance, when you’ve worked for the same company for several years, you may become less in tune with your value as a worker, since you’re not actively interviewing, according to Rousseau. By instituting a quantitative salary structure, employers are tying salaries to some sort of real market data.
“Over time, if you have transparency, people are more likely to be paid what they’re worth,” said Rousseau. “That’s beneficial for both retention and a sense of organizational justice. And we know that organizational justice and trust in senior management are very closely tied.”
When salaries are public knowledge, employees tend to be paid more fairly, stick around longer and trust the leadership more.
“I wouldn’t sit around the water cooler and swap salaries.”– VICKI SALEMI
But it’s not all sunshine and rainbows. Rousseau pointed out that when you make things transparent, the inequities become obvious. No matter how fair the system is, employees are going to want to know why some people are paid more than others. “The critical issue with transparency is having a compensation framework that is rational, and that people understand why differences exist,” she said.
In other words, your boss has to have some pretty compelling reasons for those pay differences. Still, even objective reasons can’t stop some people from feeling hurt. Hey, you can’t make everyone happy.
Why some companies try to keep salaries a secret.
Talking about salaries at work is often frowned upon by the higher-ups, and some companies actually impose pay secrecy policies that prohibit employees from discussing their salaries with coworkers. These policies might be laid out in the employee handbook, or they could take the form of a non-disclosure agreement that employees must sign.
Usually, companies that follow this type of model are those that go out looking for star performers to add to their teams ― talent that’s likely to be bid up to a higher-than-average salary, explained Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University.
“What [employers] are trying to avoid is an internal equity issue when people who are hired recently let folks who are already employed know what money they make,” Rousseau said.
Even if management only implies that salaries ought to be kept secret, it’s tough for them to enforce it. All it takes is one too many drinks at happy hour, or a window left open on a computer screen, for salary information to get out.
“If you have transparency, people are more likely to be paid what they’re worth.”– DENISE ROUSSEAU
Not to mention, these policies are actually illegal. According to NPR, the National Labor Relations Act protects private-sector employees’ right to discuss important, work-related matters, including pay. So, even if your boss would prefer you keep the details of your salary hush-hush, they can’t punish you for blabbing.
Further, according to Rousseau, research has shown that employees are more likely to feel mistreated when a pay secrecy policy exists, and the policies increase the likelihood they’ll believe they’re underpaid relative to their peers.
“Pay secrecy is likely to undermine the sense of pay equity or pay fairness in the organization,” said Rousseau.
And, if you think your company is trying to keep salary information secret because some people are either underpaid or overpaid, you’re probably right.
When and how to talk about salaries with colleagues.
Clearly, there are benefits to having open conversations about salary. But if your company hasn’t instituted a transparent salary structure, it’s important to tread lightly when talking about people’s pay.
“I wouldn’t sit around the water cooler and swap salaries,” said Vicki Salemi, a career expert for Monster, explaining that it makes others feel obligated to share their salaries because you did. That puts them in an awkward situation if they’re not comfortable divulging that information.
Instead, reach out to a trusted co-worker privately. “You can say, ‘I think it’s important to know what we’re worth, and I’m doing some research. If I tell you what I’m earning, will you tell me what you’re earning?’” said Salemi, adding that you should promise to keep that information confidential.
Rousseau said it’s also worth talking with anyone in the office who’s recently threatened to leave and received a counteroffer to stay. Not only are they likely to be among the highest-paid employees, “that person is really key in terms of getting good market information,” she said.
What to do if you think you’re underpaid.
So, what do you do when, after polling a couple coworkers, it seems like you’re getting the short end of the stick?
Salemi suggested contacting the professional organization for your industry to get a ballpark range of salaries. For instance, if you’re an accountant, talk to the American Institute of Certified Public Accountants. If you’re in human resources, contact the Society for Human Resource Management. Explain that you want to know your worth based on factors such as geographic location, education level and number of years of experience. This is information you can bring to your boss when you ask for a raise.
However, Salemi pointed out that in general, the longer you stay at a company, the worse off you’ll end up financially. Spending a few years with one organization to gain experience and then moving on to another company ― ideally, every four to five years ― is one of the best ways to increase your salary and expand your network. You might want to take the salary information you’ve gathered straight to the hiring manager of your dream job rather than attempt to negotiate a better salary at your current company.
Of course, some people don’t want to job-hop every few years, and that’s OK, too. Maybe “they know their 401(k) is being matched every year, they have a great commute, they know their job with their eyes shut and they’re happy,” said Salemi. “So if you do stay longer, I say try to move around internally.”
The bottom line is that you should talk about salary at work ― with discretion ― because it allows you to hold your company accountable for fair pay practices and ensure you’re getting paid what you’re worth.
As Salemi pointed out: “Employers need to be fair not only because it’s the right thing to do, but because employees can walk at any time and find a better paying job elsewhere.”
If you find out you’re being underpaid, that’s probably what you should do.