Will social media bring down the final barriers to pay transparency? by Adam Sorensen

I had a conversation last week with a colleague who had just finished interviewing for a new position. He said that the interview had gone well until he was asked what he called “the unanswerable question” –

What are your salary expectations?

It’s clearly dangerous territory. Choose a number too high and risk losing the job; choose a number too low and leave money on the table. Knowledge is power, and it’s clear who holds the power in these situations. Without meaningful data, job candidates are often left with some combination of anecdotal information, feigned modesty, and wishful thinking.

Of course, HR professionals have salary surveys, grade levelling criteria, and all kinds of other sophisticated tools to guide salary decisions. But information that once existed only in the shadowy world of HR spreadsheets is slowly making its way into the public domain, and this has the potential to change the way that organisations manage information that was once marked “strictly confidential.”

Today, resourceful employees and job applicants can find information about a company’s pay programs in a variety of places. Some of these, such as online discussion boards, are relatively informal and allow individuals to share all kinds of information, which may include information about their latest merit increase, incentive payout, or benefits scheme. Within industry or profession-specific discussion boards, it’s not uncommon to find discussions about how much a position might pay or which companies/managers to avoid.

Others take a more direct approach. Take the website www.glassdoor.com for example, which provides ‘anonymous salaries, company reviews, and interview questions and reviews for over 80,000 companies – all for free!’ This includes searchable pay ranges for specific positions within specific companies. What’s more, employees can leave feedback on the organisation and its leadership. Unhappy with your manager or pay? Want to know the average compensation for employees doing the same in your organisation? Information, and possibly revenge, may be only a few clicks away!

Of course, pay transparency is not a new issue. The public sector has generally adopted greater pay transparency than much of the private sector. In my home state in the US, it’s possible to look up the precise salary information of every state employee by name in a public, online database. It’s almost surreal. Executives within the private sector have seen their pay (sometimes rightfully so) as fodder for the evening news and fuel for public outrage. Legislation is pending in countries around the world trying to strike the right balance between the rights of the public and shareholders to have access to this information and the rights of individuals to keep their personal information private.

As reward professionals, the free flow of pay information – which is often inaccurate or incomplete – presents all kinds of challenges. Should organisations respond by developing and enforcing new policies against information sharing? Should they try to reduce the amount of information shared with employees? Or should they take the opposite stance and share more information and try to use these technologies to their advantage? I’m honestly not sure. It’s hard to imagine what might happen if the salary of every employee in every organisation were suddenly exposed tomorrow, but it’s not hard to see how a slow trickle of not-always-reliable information might almost be worse.

Whether these trends will drive greater pay transparency within the private sector remains to be seen. However, the rise in employees sharing information online, which may then be aggregated or accessed by others, could spell the end of at least one more ‘unanswerable question.’