Livestream: Total wage transparency is the way forward

It’s always been a contentious issue to raise in the boardroom – the subject of pay-cheques. And not just your pay-cheques, but that of your boss, no less, or even your co-workers, and friends.

But have you ever wondered what it would be like, to have complete transparency, vis-à-vis the pay packets we take home. What if everyone’s salary was a matter of public knowledge in the workplace. Would it help foster a healthy milieu or would it throw things into a tizzy?

David Burkus has spent a good chunk of his life researching queries like these surrounding that mythical creature known as the cost to company or CTC. In his speech, he says if everybody knew what everybody got paid, then all hell would break loose. There’d be arguments, there’d be fights, there might even be a few people who quit. But he goes on to question whether secrecy is the reason for all that strife? “What would happen if we removed that secrecy? What if openness increased the sense of fairness and collaboration inside a company?”

Burkus refers to a 2015 survey of 70,000 employees, where two-thirds of everyone who is paid at the market rate said they felt they were underpaid. Of those who felt underpaid, 60 percent intended to quit, regardless of where they were – underpaid, overpaid or right at the market rate. Talking about a company’s reasons to maintain pay secrecy, Burkus argues that keeping salaries secret leads to what economists call information asymmetry. This is a situation where, in a negotiation, one party has loads more informationthan the other.

The researcher says that if we really intend to close the gender wage gap, maybe we should start by opening up the payroll. If this is what total market failure looks like, then openness remains the only way to ensure fairness.