Uncommon sensical HR #5: Salary policy
You know the annual issue of Parade magazine that lists the salaries of 50 or 70 people or so? Most of them are man/woman on the street types of things, with a few celebs and others thrown in. I always wonder about how they get people to give their income. And I wonder what, if any, angst it causes the organizations that employ those people.
So here’s my nuttiest HR policy of all: publish everybody’s salary. Let everybody know what everybody else makes.
What would the ramifications of such a policy be?
In the case of for-profit CEOs, it turned out to be a big mistake. The SEC thought it abominable that CEO compensation had skyrocketed from 5 times the average salary of the firm to 10 times. Over mighty howls from executives, the SEC began requiring public disclosures of CEO compensation. Major backfire! Since disclosures, CEO salaries have jumped: 364 times the average worker according to a CNN report last summer.
I realize this is an argument against my policy. But just looking at CEOs makes it different; I’m not convinced the same thing would happen (skyrocketing salaries) with my policy.
Chances are you’ll get a lot of griping and moaning, some jealousy, and other nasty emotions. But I contend that that stuff is just under the surface anyway, and it bubbles up from time to time in ways that are detrimental to your organization. Once it’s out there for a while, there’s no need for the griping and jealousy. If an employee is discontent with what they make, they are free to try to go elsewhere, inside or outside the organization. It could also be motivational to people just starting out in the lower salary ranges, if a message of work hard you will be rewarded is part of the culture of the organization. Plus, I just like the ultimate in transparency that such a policy demonstrates.
One major caveat is the specialized element of association work. There are many organizations where you not only have to worry about other staff griping and jealousy, but also members if the profession is less compensated than association management (stop laughing, there are some). To be honest, I’m not sure I can resolve this argument. I’d admire an organization that did it anyway and told/convinced any complaining members that this is what it costs to provide the level of service the profession deserves.
A final thought. If outright salaries are too sensitive, then I’d advocate a pretty strict graded salary structure—and let everyone in the organization what each job is graded at and give them access to the entire salary scale for the organization. Maybe have a $10,000 or $15,000 range makes salary disclosure more palatable.
So that’s it. Feel free to rip apart this or any other post in my uncommon sensical HR policy thread. I hope you’ve enjoyed it… as with so many of my posts, I have this sneaking suspicion that these posts will contribute to the fact that no other association is ever likely to hire me again based on my Acronym writings. Oh well, I’ll always have my shepherding to fall back on.
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Comments
I think the range idea makes sense, similar to how Congressional leaders disclose their incomes.
Posted by: Jeffrey Cufaude | April 4, 2008 1:23 PM
Very insightful Scott, particularly your thoughts on those in the lower salary ranges. I believe it's very important for people in that bracket to know what exactly they can expect and look forward to as their career and work experience progress. Ultimately, salary is a huge motivating factor; why keep it a mystery?
Posted by: Michelle Allen | April 4, 2008 2:42 PM
Amen. And while you're at it, publish all the financial information. Or at least as much as you can. Open up the books to everyone, and that way people just might be able to help you come up with ways to strengthen the organization financially. I heard a presentation years ago of a little restaurant in Maine that opened up the books to the employees with the explicit challenge to them to find ways to be more profitable, and they ended up surpassing everyone's expectations.
Posted by: Jamie Notter | April 4, 2008 3:21 PM
Scott, interesting topic here, I feel obliged to post even on a Saturday. I don't have a problem necessarily with staff knowing my salary. We need to emphasize performance based evaluations in our staff culture of entitlement theory. Many of our staff don't understand the connection of hard work to a salary increase, they just think well it's that time of year when I get a raise, no matter the heft of my contributions, or lack thereof.
Referring to your mention of disclosure/transparency: There are many organizations where you not only have to worry about other staff griping and jealousy, but also members if the profession is less compensated than association management (stop laughing, there are some).
Ha ha haaaa...My organization is one that serves a large population of members who work in social services for older adults, an area where many do not make a very decent salary. I think there would be tremendous jealousy or irritation that some of our staff make as much as we do. Granted, I work my butt off and have performed very well to earn a promotion---but they don't necessarily see that on the outside. It's about their dues going towards big fat salaries in their eyes. But they don't understand that salary is only a part of the operating budget for an organization of our size. The challenge would then be in continued communication of the value of their dues in providing them with the benefits and services they get for the money.
Additionally, our staff and members see our organization soley as an "aging organization" and not a "membership organization"...when in fact we are both.
Posted by: Anne Ornelas de Lemos | April 5, 2008 1:51 PM
Anne - thanks for these comments. I know you were making a point about the entitlement theory, but I think you went just a little too far: "no matter the heft of their contribution, or lack thereof."
If there's no or little contribution from them, why do they work there at all. (See my first post in the series: my first HR post.)
As for the members who are not well paid, as I said, I think that's a valid point and maybe my ideal policy wouldn't be advisable. But then again, those tensions are going to be there just below the surface anyway, and they will bubble up--perhaps at the most inopportune time.
Posted by: Scott Briscoe | April 5, 2008 4:05 PM