As indicated by Burkus (2016), it is crucial to know how much your coworkers get paid. This is due to the fact that companies may use secrecy as a way to deprive their employees of the fairness of income transparency. Burkus (2016) insists on the necessity to disclose what every employee earns in a bid to increase job satisfaction and probably reduce conflicts as a result of dissatisfaction. Contemporary companies are using different methods of disclosing the amount they pay their employees. For example, some companies have job groups where they tell employees how these groups get paid. To understand what other employees get, one employee can just extrapolate the pay-scale and determine what their colleagues above or below them get paid. Other companies use the same method where they give income brackets and other related remunerations such as allowances. This way, they can suggest to the employees how much they get paid prior to commencing their work and what it would take to achieve certain levels.
John Stacy Adams presents three forms of equity theory. The equity Theory determines the level of satisfaction at workplace that impacts an employee’s balance. The equity theory focuses on equity, not-equity and the balance between the two. Lack of balance motivates employees to react in one way or another. If there is balance, the employee decides to stay the same and maintain their levels of input and output ( Sadovnik & Coughlan, 2016) . When they are underpaid, they choose to seek for greener pastures, complain to their employers, or opt to reduce their input. In situations when they are overpaid, employees attempt to work harder to increase their input to match the level of income that they receive.
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Secrecy promotes the prevalence of fraudulent activities, and it creates an enabling environment for organizations to set aside large sums of money that should have been otherwise used to remunerate employees. Keeping compensation secrets prompt what financial experts call data asymmetry. The strategy is used in circumstances where one group has substantially more data on payment than another group. One will be better placed to champion for a raise if he or she knew everyone's compensation. Pay transparency exits in a myriad of structures since it is not one size fits all phenomenon. As a result, the problem can only be solved through the application of a vast assortment and dynamic solutions. Notably, few organizations post employees’ pay rates for anybody, including external stakeholders, other entities perceive such information as very confidential. Some post their equation for figuring pay level, and others post the compensation levels for their staff.
What is more, research shows that individuals are continually striving to gain a better understanding of how the company remunerates it personnel. In the aforementioned equity theory, John S. Adams contended that individuals are continually attempting to determine contributions to yield. This is where they will be interested to know what other employees make and are disappointed when they have a feeling that they are contributing more than they are getting in returns compared to their counterparts. If an employee knows no one knows their payment, they will think that others think of them unfairly ( Sadovnik & Coughlan, 2016) . They will also think that in the same way, someone is overpaid or underpaid. Such thoughts about employee’s unfair treatment at workplace may bring about mild conflicts or even tough confrontations.
Disclosing the amount employees pay is a good way of ensuring employees relate with coworkers comfortably at the workplace and even outside the workplace. It gives employee the feeling that they are not paid unfairly, and even people close to them such as friends and family members get open and fair reflection of their input at the workplace. An employee may get the impression that the reason their pay is not in the public domain is because their employers are trying to hide the amount other their colleagues who are probably getting higher payments. Then again, it could also bring the impression that others are underpaid and that that should not be the case at the workplace. One could imagine a situation where their wife, husband, sister or brother is paid unfairly and choose to disclose their pay so that the information triggers the decision to complain for a pay increment.
Transparency in payment systems could also work as a motivation factor where employees work harder to get promotions that result in higher pay. It could also motivate people to work harder since they feel that they giving it back to employers. The same could be said of disclosing employee’s payment information when they are poorly paid. Such information may force employees to seek jobs elsewhere, especially when they compare their pay with that of other organizations.
The reason why most organizations fail to disclose their employees’ pay is due to rivalry from their competitors. Due to ethical reasons and considerations, these organizations do not want comparisons to other organizations' payment systems. Some organizations feel that information regarding an employee’s pay could compromise their privacy and confidentiality of such information. For example, some employees find it nagging to get asked what they earn due to their need to keep information private and confidential. However, these organizations could be a true reflection of the amount they make in terms or income and expenditure but it could demotivate employees. High levels of employee turnover are a reflection of work dissatisfaction.
As a student, I consider my input into my grades to be a fair replication of my efforts. I always find that working harder has rewards, and this is the reason I support the grading system. As much as some external factors could have distractions in a student’s attempt to work harder, it could also mean that they are not giving their best. The grading system has been tried and tested through scientific methods of motivating students to work harder (Sadovnik & Coughlan, 2016) . However, it could be a demotivation factor for students who may have tried their best but came across some misfortunes along the way. This could be the reason why some universities and colleges use online portals to explain why a student failed in a private message. Therefore, it is conspicuous that the decision to keep employee’s pay private or public varies across the spectrum. However, hiding remuneration information raises more suspicions and harm than disclosing such information; an endeavor that would also contribute to the improvement of the organization’s image.
In conclusion, I concur with Burkus (2016) that salaries should be made public and that organizations should practice transparency in a bid to adhere to professional ethics. However, these organizations should use a strategic approach to disclose employees' pay by focusing on systems that cannot expose too much of employee information, while at the same time, ensuring transparency. Adams’ equity theory is a perfect explanation of employees’ reactions to how an organization compensates and discloses their pay. When they realize that they are underpaid they reduce their inputs, and the opposite could be said of the situations when they are overpaid. A balance between the two could make them complacent or practice laxity. For this reason, other methods of encouraging employees are recommended.
References
Burkus, D. (2016, October 11). Why you should know how much your coworkers get paid. Retrieved from https://www.youtube.com/watch?v=TvcNw4F0Y4Y
