Do you advocate pay transparency?

Pay transparency is a much discussed topic. Some small organisations claim to be practising pay transperancy, but it can be tricky! No one can afford complete transparency as it can lead to unnecessary conflicts and ill feelings. On the other hand, it can also lead to equality, meritocracy and a culture of honesty and trust. The pertinent question here is, Can pay transparency end salary negotiations?’ HRKatha spoke to HR leaders across sectors, to find out whether they advocate this concept. Here are some of the responses:

Sunil Singh, former CHRO, Stellar Value Chain Solutions

Sunil Singh, former CHRO, Stellar Value Chain Solutions

Though PSUs and governmentsector jobs follow complete transparency in their pay structure, I will not advocate the same in any organisation. I believe the processes and policies related to compensation can be known to everyone, but not the exact figures. Every individual comes with a unique set of skills and talent, and everyone cannot judge their value accurately. There are some intangible values that people add, which are measured differently by different organisations. Therefore, pay transparency can lead to conflicts and heart burns.

Pay transparency is an idealistic scenario and only mature organisations — very few in number — can make it possible. On the other hand, bringing an end to salary negotiations is a different thing. I believe CHROs should ban the question, ‘What was your last drawn salary?’ If the candidates fit the bill and the requirements of the organisation, what they earned in their last job should not matter. One should just go by the organisation’s bands and decide upon the salary.

Satayjit Mohanty, former CHRO, Crompton

Satayjit Mohanty, former CHRO, Crompton

There are different degrees of pay transparency. I definitely do not approve of the extreme of not being transparent at all. At the same time, complete transparency does have the potential of leading to conflicts amongst teams. Also, some companies do have a very complex compensation structure which is not easy to be understood or explained. Besides, every skill demands a different kind of value in the company, it gets difficult to explain such complexities to people. I am okay with partial transparency. Pay transparency can be definitely helpful during salary negotiations, and some organisations follow it. However, it is only possible for entry-level or management roles where every talent is treated similarly. While hiring for senior level roles, the compensation gets more income driven and complex. There, pay transparency cannot be much of a help.

Mangesh Bhide, SVP – HR, Jio Network & Infrastructure

Mangesh Bhide, SVP – HR, Jio Network & Infrastructure

I‘d say ‘partially’, because if I choose to bring pay transparency in my organisation, I will be transparent only about the components — the pay structure, the bands and the guidelines of the compensation structure — but not the exact numbers. This is because, I believe that
only the managers understand the true value of people. The others may not understand why one person gets a better raise than the other. We can surely put an end to salary negotiations for the bulk-level roles such as sales, maintenance and so on. However, this cannot be done for specialised roles and skills, as specialists may vary in terms of their degree of skills and the value they add to the organisation.