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Could Salary Transparency Close the Gender Wage Gap?


Little by little, cultural taboos in the U.S. are being eradicated. With each passing generation, we grow increasingly comfortable with discussions that would have stunned those who came before us. However, there is one remaining taboo in our society that is going just as strong as ever: money. We don’t talk about money, not with our friends, often not even with our families. And, sharing our salaries with our co-workers? Well, that feels completely out of the question. But, there might be something to gain from talking about pay with our colleagues and getting a little honest with each other.


(Photo Credit: 401(K) 2013/Flickr)

In fact, some small businesses are choosing a policy of salary transparency in order to improve workplace culture, fairness, and feedback. Let’s take a closer look at the reasoning behind these decisions.

Do You Know What You're Worth?

1. Sites like PayScale have already improved transparency.

The very purpose of PayScale is to provide folks with the compensation information they need. Understanding the salary range for a specific job, in a specific location, allows workers to know what they should expect while also letting employers know what they ought to deliver.

2. Transparency is a prerequisite for fairness.

How can we know we’re being paid fairly without knowing something about what our co-workers earn? Companies who want to address the gender wage gap, for example, need to analyze their data before making the necessary adjustments. On an industry-wide level, we have to understand what goes into creating unfair pay, before we can address it. Salary transparency makes sure that unconscious bias plays a smaller role in the discrepancy.

3. It keeps employers honest.

The company Buffer began in 2011 the way a lot of businesses do – with just a few people. Three co-founders earned the same pay, and everyone knew it. But, as the company grew and new hires were brought in, that started to change. It was then that the co-founders laid out some core values aimed at improving transparency and fairness. They didn’t just share salary information though – they were also transparent about the formula used to calculate how much different positions were paid, individuals’ numbers and progress reports, and they also shared data about the company’s revenue.

This level of transparency “forces leaders to really focus on fairness, as they can’t hide favors,” says organizational psychologist Karissa Thacker.

Hopefully, eliminating the taboo of talking about salary will allow for more fairness – and maybe even better compensation plans for all of us.

Tell Us What You Think

What do you think about the idea of salary transparency? We want to hear from you! Leave a comment or join the discussion on Twitter.

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