To Be Transparent or Not to Be Transparent?

To be transparent or not to be transparent: that is the question. Here is a thought experiment for you: imagine if your company decided to become completely transparent tomorrow. How would it go? How would employees react? Would it go over very well? The decision to become transparent is not a light decision. The transition itself can be both distracting and time-consuming; a lot needs to be considered before moving on the pay transparency spectrum. That said, for many, the rewards outweigh the challenges. Companies like Buffer, SumAll, and Chewse, a PayScale customer, are already fully transparent about pay. Some of these companies have had a lot of success in employee retention and engagement by being completely transparent.Here are some things you should ask yourself before deciding to increase transparency in your organization.

Pay Transparency Readiness Question #1: What is your company culture like?

Transparency may not currently be one of your company values. Employees and managers need to feel comfortable enough to have ongoing discussions about things that may seem difficult to talk about, like pay. Many smaller companies naturally have a more open company culture because it is easier to communicate one-on-one with just a few employees. For larger companies, it may be harder to have transparent communication. Employees may not even be in the same time zone as their managers, let alone on the same page. Find out if transparency is something that fits into your company culture. For Chewse, pay transparency was a natural extension of their existing company values, where for SumAll it is a bit of a transition for incoming employees.

Pay Transparency Readiness Question #2: Who makes up your workforce?

A lot of workforces are now multi-generational. Different generations expect different levels of transparency. The millennial generation has had more access to information and therefore expect greater communication and data-driven decisions. If the majority of your workforce consists of millennials, then you may want to consider increasing transparency.

Generation Z is coming to the workforce next. While we don’t know a ton about them, we can guess from their online presence thus far. They seem to have learned from their millennial predecessors, who are starting to see very public online choices impacting career opportunities, and prefer somewhat more private communication. If you think you can just keep your comp plan behind closed doors and wait for Gen Z to take over, remember that millennials will be the majority generation in the workforce for a number of years to come.

Pay Transparency Readiness Question #3: Is your company ready to expose everything?

We understand that things can sometimes get a little messy. Are your company’s compensation strategy, philosophy, and practices in order? When you become fully transparent, all of these will be visible to your employees, customers, competitors and maybe even the media. If you don’t think that your company is ready to bare all, it may be a good idea to get your house in order first.

After careful consideration, you may decide that your company is ready to increase transparency. It is important to find what is right for your organization. Pay transparency does not need to be all or nothing. Start by deciding how transparent you want to be, then make a plan to get your organization there. If you want to find out where your company currently falls on the PayScale Pay Transparency Spectrum, check out this ebook.

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