Author Topic: Should we know other people's salaries?  (Read 2192 times)

Jurgis

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Should we know other people's salaries?
« on: October 29, 2018, 10:04:04 AM »
There's somewhat of a movement (articles/etc.) that knowing colleagues' salaries is a good thing (TM).
There is some argument that this improves your own negotiating position, etc. (Well, it works for CEOs clearly!  ;)).
OTOH, you could argue that knowing colleagues' salaries lead to envy, hate, toxicity, etc.

What do you all think?

Vote.  8)
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mwtorock

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Re: Should we know other people's salaries?
« Reply #1 on: October 29, 2018, 10:12:38 AM »
There's somewhat of a movement (articles/etc.) that knowing colleagues' salaries is a good thing (TM).
There is some argument that this improves your own negotiating position, etc. (Well, it works for CEOs clearly!  ;)).
OTOH, you could argue that knowing colleagues' salaries lead to envy, hate, toxicity, etc.

What do you all think?

Vote.  8)

I think it is helpful to know the range of salaries of your coworkers. That way you can tell whether you have a future in the place or not, or whether you are undervalued or not, etc.

Liberty

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Re: Should we know other people's salaries?
« Reply #2 on: October 29, 2018, 10:41:49 AM »
At the time when looking for a job or negotiating for a raise, it can be useful.

Otherwise, I can't think of any good that can come of it and it's pointless. For many people it'll play into a bunch of negative cognitive biases, but I can't think of any positive ones (except maybe some people driven by a mix of ambition/envy).
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Gregmal

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Re: Should we know other people's salaries?
« Reply #3 on: October 29, 2018, 11:21:37 AM »
I see no point to it. You should know what you are worth, or I guess at least, what you are comfortable doing for a said price. That's all that really matters.

TwoCitiesCapital

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Re: Should we know other people's salaries?
« Reply #4 on: October 29, 2018, 01:40:46 PM »
I fall in the middle. If the company is good at keeping records of internal reviews and can justify why a differential exists, open it up and let people know IF that's what the employees want.

Without having documented justification for differences though, it will likely create a toxic environment where jealousy arrives and a bunch of people demand pay raises regardless if they have earned them or not. They will feel entitled to the money without understanding the negotiation that went into it or the performance reviews that led to it.

Ultimately, a salary is a scorecard of relative performance (and negotiation ability). You have to make sure you can explain the disparities i.e. why someone is 1st in pay and someone else of the same position is in 10th. It also helps if salaries already reflect relative performance before making those disclosures....

LC

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Re: Should we know other people's salaries?
« Reply #5 on: October 29, 2018, 01:47:52 PM »
Absolutely yes. Although I will disclaimer that I am not the type to get jealous over these things.

I think generally, the more transparency the better. It is easier to take advantage of people who know less vs. people who know more.

Specifically, I think salary knowledge helps as others have mentioned in negotiations, knowing how your employer views you, etc. "Honest is the best policy".

What's the worst case, you believe you are underpaid/your co-worker is overpaid? You can either sit back and feel jealous and resentful, or you can behave like an adult and have a conversation with your manager to understand why that is the case.

Shit, if you have a good management team, they won't even wait for this. They will approach you and explain why you are paid this amount vs. your team-members.

So I think yes, it is good to know - but it requires a level of professionalism from all parties (employees and management).

There's a Munger quote out there about being wary of the person who limits your access to information. One of my favorites because it extends beyond investing and hits at how you treat people throughout life.
« Last Edit: October 29, 2018, 01:50:17 PM by LC »
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undervalued

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Re: Should we know other people's salaries?
« Reply #6 on: October 29, 2018, 02:19:16 PM »
Yes. Why? Because it will make a huge difference by time you retire.

Do you think Glassdoor (or other internet job search website) range is accurate? You won't know until you ask coworkers.

From my own experience, it's not accurate. If I use Glassdoor average, my salary is too high for my position. This indicates I won't likely find similar paying job if I chose to look for a new one. In my current company, I am in middle of the salary range.

I do realize that some people do ENVY so I don't think this is for everyone. You will find people who do less than you and get paid more, maybe a lot more. For me, I take it as a learning opportunity and reflection.
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flesh

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Re: Should we know other people's salaries?
« Reply #7 on: October 29, 2018, 04:04:16 PM »
If we are talking about mandatory disclosure. No. Free market. Private property. Nobody has any business knowing what I pay people.

If we are talking about glass door or similar, sure.

abitofvalue

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Re: Should we know other people's salaries?
« Reply #8 on: October 29, 2018, 08:49:01 PM »
yes.. it would improve negotiating position of the average worker AND increase probability that managers actually pay based on performance rather than use confidentiality to pay based on whatever is easiest / convenient.

Intrestingly - I think California has a law that makes it illegal to force employees to keep salaries confidential that went into effect recently. Already having an impact at a couple of firm in finance - I've heard of West Coast offices getting bigger bonuses than NY..

Jurgis

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Re: Should we know other people's salaries?
« Reply #9 on: October 29, 2018, 09:22:41 PM »
Some additional questions to ponder:

- You can ask your colleagues what their salaries are (yeah California. MA soon too). Do you? (Not friends, but random colleagues). I don't.

- If a colleague asked you your salary, would you tell them? (Assuming they are not a friend). I would not.

- Do you ask your manager to tell you salaries of other employees? Would you ask them if company explicitly told you that you can ask? I'm not sure. Maybe..

- If you're a manager/business-owner, do you tell your employees salaries of other employees? If you don't do it because of company policy, would you do it if company was neutral about it? I'm not a manager, but I probably would not.

- I don't know any company/management that voluntarily discloses salaries of employees to other employees. Any examples of companies who disclose?

- Should the management be forced to disclose salaries of (all?) employees to (all?) other employees? I don't think they should be forced. I do like the CA/MA laws that make it illegal to force employees to keep salaries confidential. Employees should be able to tell their salaries/bonuses/whatever if they want to.
« Last Edit: October 29, 2018, 09:32:44 PM by Jurgis »
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