Should you disclose employee salaries?

Money

By 2bgr8

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Do you think it’s a smart idea for startups and small businesses to disclose all employee salaries? Why or why not?

1. It’s weird

I don’t think it’s smart or stupid, but it is weird. Unless you’re doing it for the purpose of generating exposure and press, I don’t see how anyone benefits or why anyone would care except your competitors, investors and future potential hires.
— Carlo Cisco, SELECT

 

2. It should be a private matter

Compensation is a sensitive topic and should be treated carefully. Because people don’t bring the same level of skills and experience to the table, their compensation shouldn’t look the same. Compensation should be awarded individually and kept private.
— Sarah Schupp, UniversityParent

3. Transparency can benefit your company

Buffer recently disclosed all employee salaries. Why? Because it’s consistent with Buffer’s strategy to default to transparency. Buffer also publishes its revenue and user numbers publicly every month and allows employees to access email exchanges among each other. Posting salaries for Buffer is another step toward its dedication. Only do it for your company if it makes sense.
— Brett Farmiloe, Internet Marketing Company

4. Disclosure can be messy

I don’t feel that it’s a smart idea because of how sensitive the issue can be. It opens the potential for employees to feel negatively about their worth, as opposed to other employees, and possibly even negatively about the company. There’s a whole mess that can be created just because of the personal feelings caused by that kind of information, and that’s an unnecessary door to open.
— Daniel Wesley, Creditloan.com

5. Strategies change at each company

No policy or strategy is smart for every company. Look to your values and culture as a company to determine if a policy or talent strategy is wise. In the case of disclosing salaries, it makes sense if a core value is transparency and other typically confidential items are made transparent.
— Susan Strayer LaMotte, Exaqueo

6. Numbers can be deceiving

I am all in favor of transparency, and on its surface, I thought this was a great idea. However, there is an issue that startups specifically have to deal with — stock. On the surface, it may appear that some employees have unjustly lower salaries than their peers only because they chose more aggressive stock option plans in lieu of cash. If you publish just the salaries, it can be deceiving.
— Danny Boice, Speek

7. Disclosure is best

A startup should disclose all employee salaries in the interest of being truly transparent. Transparency builds trust.
— Andrew Schrage, Money Crashers Personal Finance

8. Disclosure causes unnecessary competition

Transparency has been huge for the past few years, but not everything about a business needs to be disclosed, and an employee’s salary is one of them. Disclosing all salaries can almost gamify your work environment by turning it into a competition and creating division among the team.
— Caitlin McCabe, Real Bullets Branding

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