Salary Confidentiality: Should We Keep Pay Details Under Wraps or Share Openly?

Hi Friends,

Should salary matters be confidential....?????

1. When this question is asked to employees, they always say - No, it shouldn't.

2. When asked by us (HR people), we always say it should.

So friends, I want to know your suggestion - what is right..?

Hi Shreya,

From an HR point of view, it should always be confidential. If employees talk about their salaries themselves, HR can't help. So if you are in HR, you need to take care that salaries remain confidential from your end.

Enjoy,
Harshad

Yes, it must be confidential. As commented by Harshad, if they share it among themselves, then we cannot do anything, but we need to remind them that this information should be kept confidential, specifically highlighted during the orientation. The salary given is dependent upon a person's knowledge, skills, and experience. If people start comparing, then you'd have a lot of ill feelings, dissatisfaction, or people claiming there's favoritism, etc. You don't want to get yourself into that kind of situation.

What employees should know instead is the salary range, the maximum limit of the salary they will get for their current position. Hence, when they reach the limit, they will have to work hard to be upgraded/promoted to start earning more, giving them something to strive for. Also, you do not have to keep increasing the pay for someone who doesn't want to upgrade themselves or doesn't perform.

My humble thoughts.

There are many factors that we consider while deciding the salary of people but they do not see that. Hence, salaries should always be confidential.

Some the factors that are considered while deciding the salary are:

1) Your Last Drawn Salary

2) Your Education Level

3) Companies and industries that you have worked in

4) Your total and relevant experience

5) Relocation etc.

Employees, do not consider these factors when they decide to discuss their salaries. For them, its only their age and “total experience”. This actually leads to unrest within the company.

Just to give you one example. In one of my previous companies I had two employees, both were in 29 years of age and having 5 years of experience. One was getting a salary of 2 Lakhs Per Annum and Another was getting 20 Lakhs per annum. Hence, the person with lesser salary came to HR and just said, “we both are having similar amount of experience then why there is a difference in salaries. Does this mean that he is more hardworking?” The actual facts of this case are:

“Both were of similar age. Both were MBA's. Both were having 5 years of experience. But, one did his studies from IIT-Kanpur and IIM-Kolkata and worked with American Express for three years in New York, USA”. Do you see any reason for another person to compare his salary and feel sad and unhappy about the fact that they are getting different salaries?

Hence, this is a reason, why salaries should be confidential.

I hope, this will help you.

Regards

Sanjeev

Hi Shreya, Greetings! I am sure you will agree with me to the fact that Exit Interviews never give the real picture as to why employees leave Organizations. It is known that Peer Comparison is one of the very important reasons for Employee Attrition. It is not always necessary that people with similar Education background, similar Expertise, and similar experience will have to be compensated equally. We might put people in Bands and it is our bounden responsibility to maintain confidentiality as far as Remuneration goes. That's the essence behind this. Hope I cleared your query. Regards, Madhu.S

Certainly, by making salary information confidential, you can avoid unnecessary conflicts in the office (peer to peer, peer to manager, etc).