The Guardian, November 7, 2013, Thursday

The Guardian

November 7, 2013, Thursday

The Guardian (full article)

Equal pay day: a plea for transparency

So, if it's as simple as publishing salary guidelines on your company's intranet, why isn't everyone doing it? In an article for Inc, Samuel Bacharach, professor of labour management, points out that research from the '60s and '70s tended to indicate that when asked to estimate their boss's and peers' salaries, people would underestimate what their boss earned and overestimate their peers. Whether that's still the case is uncertain but, given human nature's tendency to assume the worst, it seems unlikely that we're assuming we out earn the rest of our team. And if we knew that we did, would that make us happier employees?

Larger organisations could learn from Bluffer, particularly if they want to increase engagement among employees. A study by Elena Belogolovsky and Peter Bamberger found that pay inequality negatively affected the performance of workers, particularly those with a lower tolerance for inequality generally. However, their recommendations shied away from publicly announcing what everyone in your company is earning. Instead, they found that simply being more open about salary bandings and what employees had to achieve in terms of performance improves engagement.