Business Finance Homework Help

I’m working on a management discussion question and need support to help me learn.

Please remember that the response you’ll write to both individuals are not to critique their work, it’s more analyzing what was said and giving your input whether agreeing or disagreeing with their views on the topic.

1. I can somewhat understand secrecy of salaries among subordinates in order to keep staff from comparing numbers and potentially complaining about inequities. Additionally, staff may make adjusts to their work efficiency and production to reflect what they see as undervalue of their contributions when they find out someone at a similar level makes more than them. The issue with withholding salary information is that staff members are going to chat amongst themselves and reveal their salaries, therefore further contributing to the secrecy and potential conflict of perceived and known inequities that exist. There is no way to keep it truly private and further making it a cloak and dagger even perpetuates and encourages it. However, allowing organizations to keep salaries confidential does allow for discrimination, whoever intentional or not, amongst similarly qualified and experienced staff members. Furthermore, making salary details transparent can encourage competition amongst staff, causing coworkers to compare experience as well as contributions and efficiencies to their compensation packages. If there is disparities that don’t quite make sense, they can be brought to light and rectified. Audits have revealed disparities that were then rectified within my organization, because staff didn’t know what others made in relation to them and their position and therefore they didn’t realize they were in fact not being compensated appropriately.  It can therefore inspire potentially underachieving employees to make and meet more specific goals and objectives for the organization if they feel they will be rewarded appropriately. Many organizations assign pay grades to specific job positions in order to ensure that there is at least an appreciate range of pay, although it usually varies substantially. The variance is reasonable when you consider level of experience and accompanying designations but nonetheless it doesn’t permit for an unjustifiable pay rate to subordinates. At least if we are transparent in our salaries, we control what information is published and therefore reduce the likelihood of inaccurate information affecting staffs perceptions and morale.  

2. The article in favor of pay transparency suggests that keeping wages a secret could cause discord among employees and although I guess that could be true in some instances, I actually mainly disagree with this idea. I think one of the major benefits of practicing pay secrecy would be that it, in fact, would prevent discord among employees. If there are several different people working in the same position or caliber within a company I believe that each of them knowing what the other makes would do nothing but cause problems. One may feel that they are outperforming another employee and knowing that the other employee makes more would certainly cause hard feelings and likely cause the lesser paid employee to hold a grudge against the higher paid person. In my opinion, this situation is just a recipe for disaster.

In contrast, if a company practiced pay transparency I think it could possibly motivate employees to work hard. In the same situation I mentioned above, where several people work in the same position, learning what another person in that position makes may push others to step up their game in hopes of achieving the same pay grade as others one day. 

I think in a perfect world, it would work the way I mentioned in my latter statement. Unfortunately, I think that in today’s times so many people are so focused on themselves that it wouldn’t work that way. Instead of motivating someone to work harder and hopefully achieve better, it would just cause jealousy and disagreements between co-workers. 

If I worked as an HR professional, I would be inclined to advocate for pay secrecy. It would be because that is what I am used to at the company where I have been for nearly 10 years, but to me it just makes sense. Pay everyone fairly and give them what they deserve for the results they produce, no more or no less, and keep that information confidential. To me, this just makes sense and keeps all of the employees from being mad at one another because Sally makes more than Sue.