How to Build a Company Around Pay Transparency

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You’ve heard the buzz about companies large and small that publish employee’s wages in an effort to be transparent and validate wage equity. There are success stories and failures amidst the practice. Some research suggests wage transparency sparks productivity and drives employees to work harder and attain more goals. Determining whether pay transparency is right for your company or not may depend more on how, rather than if, you decide to adopt the model.

The benefits of pay transparency

Researchers looked at the practice of pay transparency and concluded that keeping salaries a secret is associated with reduced employee performance. In another, larger experiment workers were assigned a task and some were told what the rewards would be for themselves and others at the end of the first segment. For those who knew what their earnings and others would be, performance increased significantly for the second task. The data suggest that employees work harder in an atmosphere that provides salary transparency: some believe it may spark a previously unfulfilled competitive nature.  

Data suggest that employees work harder in an atmosphere that provides salary transparency

Others suggest that when employees are unaware of the salaries, they assume they are underpaid. When they are able

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