Executive pay and salary secrecy

Essay by mlke2oooUniversity, Bachelor's December 2004

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"I'll show you my salary if you show me yours," the corporate vice president told his female colleague. She felt uncomfortable sharing her information -- but was too curious to pass up the chance.

They ducked into an empty conference room and closed the door. Like two five-year-olds exchanging notes, they scribbled their secrets on two pieces of paper, folded and swapped them.

"I felt awful," she recalls of the moment she unfolded the paper and peered at the number. "I didn't realize I was making so much more than he was."

After gossip about romance and layoffs, perhaps the most provocative topic on any office grapevine is salary. The reason is simple: "It's the final, indisputable word on what you're worth to the company," says Mari Mineta Clapp, a vice president at a Silicon Valley electronics firm who has been repeatedly approached by salary snoops. "And it's very personal.

[It comes down to] how you feel about the fact that others are perceived as more or less valuable than you are."

Most companies try to keep salary talk a taboo, discouraging -- even disciplining -- workers for sharing pay information with other employees. And workers want it that way, companies argue. "All personnel are trained to keep [salaries] confidential," says Bruce Bunch, a spokesman for General Electric Co. "It reflects the desire of the mass of employees."

In truth, however, discouraging salary talk isn't merely a matter of privacy. Public disclosure risks exposing unfair wage practices, giving underpaid employees ammunition to fight for raises. It also uncovers wage discrepancies created when new workers are hired at market rates, which are typically above those of same-level workers who have risen through company ranks.

Some employee advocates even encourage sharing salary information as a way to promote fair pay practices. "The...