Salary transparency can mean making all salaries visible to all employees — but it doesn’t have to. Some organizations will choose to do that, while others will make some aspects of their compensation planning more transparent. Whether or not your employer reveals all the details of your pay, having more information about the thinking that goes into your salary is a good thing.
In the U.S., if you work at a government job, your salary is often a matter of public record by law. In many other workplaces, however, salaries are still a mystery. If you want to have full salary transparency at your job, no matter what you do, then Norway is the place for you.
Norway, Land of Salary Transparency
In fact, Norway, a country with a population slightly lower than that of the state of Minnesota, has had salary transparency since 2001. Initially, according to this BBC article, this led to a fad of everyone was getting all up in everyone else’s business, researching the salaries of neighbors, friends and colleagues. However, since the government made salary searches not-anonymous in 2014, inquiries have diminished considerably. (Think about how you’ll hesitate to click on a LinkedIn profile, when your settings are configured to notify them that you’re peeping.)
This transparency has created a culture in which knowing someone’s salary isn’t a big deal. Instead, it’s turned into something of a boon for the government. Since Norwegians pay a considerable amount in taxes based on their incomes, you can see where someone might be evading their taxes, and the government relies on whistleblowers for just that kind of help.
European Union and Pay Transparency
In fact, Norway isn’t the only land of the transparent paycheck. Other countries in the EU offer different measures of pay transparency and equality practices. This past year, Iceland became the first nation to mandate that employers prove that they offer equal pay, both in the public and private workforce. Sweden, in a similar fashion to Norway, offers to provide citizens with anyone’s tax returns, but they’ll tell the person exactly who requested their information. Germany is also considering adding salary transparency to help fight the gender pay gap, which is admirable, since Germany has one of the highest gaps in the EU.
Transparency, the Great Motivator
A recent New York Magazine article points out that pay transparency actually helps to motivate employees — provided that the salaries revealed are equitable.
“Pay transparency may increase feelings of inequity, thus jeopardizing productivity and the control of workforce costs,” explained Elena Gitter, an ?assistant professor at Cornell University’s School of Industrial and Labor Relations. “Therefore, the real issue is not whether the pay should be transparent or not, but rather whether the compensation system is well managed, equitable, consistent and well communicated.”
This is of course not only a problem for pay gaps between qualified persons, but also an issue when that gap is based solely on a worker’s gender. The gender pay gap is real, and unfortunately, not going away in the U.S. as fast as we’d like. That gender pay gap in Norway? Not too bad. It ranks third on the World Economic Forum’s 2016 data rankings. The U.S.? It’s at number 45.
Tell Us What You Think
Would you like full pay transparency across the U.S.? We want to hear from you. Tell us your thoughts in the comments or join the conversation on Twitter.