During earlier days, salary packages were always kept a secret. However in the present era, companies seem to have done away with this trend.
When employees see that the organisation and the leadership are being honest with them at every level, it encourages a culture of merit-based remunerations, parity, and trust.
How does being transparent in the salary package improve employee engagement?
* Salaries reflect the negotiation skills of an individual, not how their skills ought to be valued by the organization. Transparency in salaries puts an end to this practice.
In an organisation that is transparent about salary packages, the chances of new employees getting an offer that is too low would be next to nil as someone would speak up about it.
* Open salaries establish a system of pay raise based on merit, not time. This merit based appraisal instills a trust through the ranks that are difficult to match by any other means. Female employees, who often witness discrimination with as much as a 25-percent disparity in salaries, would also have access to a level playing field in the workplace based on merit, and not on gender, or ethnicity.
* This will also make the employees stay in the same organisation for a longer time as they start trusting the company.
Finding out that their peers make more than they inevitably lead to discord and mistrust that is never easy to compensate for. With open salaries, employees learn to respect the organization that respects their time and skills.
* Like everything else in the world that has a good side, there is a downside of absolute transparency as well.
Transparency within the organisation may be a good idea, but making remunerations public may lead to a public backlash as well. Moreover, there are cultural and geopolitical considerations to be kept in mind while doing so.
When people find out that they are being unfairly treated by the organisation, they leave without a word instead of discussing the matter.
However, when an organisation adopts an open salary policy, there are no secrets to keep and everyone can sleep easy.
Courtesy: www.peoplematters.in
