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  • Dirk Stienaers

The Salary Taboo: When privacy and transparency clash

Salaries have been an alluring topic of discussion ever since wages have been rewarded. Salary transparency is further an important factor to detect wage discrimination & support collective bargaining. However, a recent study conducted by Harvard Business School and the US National Bureau of Economic Research indicate that when it comes to salaries, most employees prefer their privacy over transparency.

In other words, their urge to find out the renumeration proportions of their colleagues and industry peers is simply inferior to their desire to keep information about their personal salary undisclosed. Hence, employers often face difficulties to create clarity concerning their reward policies, and common acces to wage information remains limited and unequal.

Hence, new policies are required to answer the need for transparency, but also manage to provide a solution regarding people's privacy. Not all policies are therefore fit to this purpose. For instance, between 2016 and 2018, 13 of the 50 US States installed measures to penalize employers who retaliate against

workers who openly discussed salaries with colleagues. This specific policy has been proven to have a very limited effect on the situation.

Seen the duality concerning the debate, new methods need to be designed to work both ways. Since employees are reluctant towards non-anonymous transparency policies, in which their individual salaries are disclosed, companies should develop and deploy anonymous policies that display wage data across the firm, based on averages and scales. For example, the popularity of online platforms that accumulate and display salary information, which apply this type anonymous approach, indicate that there is a solution to the problem.


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