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David Burkus' Salary Discussion Looks at the Benefits of Knowing Pay

 - Dec 28, 2016
References: ted & youtube
David Burkus' salary discussion questions one of the most ingrained social mores of office culture. He asks, "What would happen if everyone in a company knew all their coworkers' salaries?" Based on his studies of successful, innovative companies, he found that the answer might be surprising.

The assumption behind keeping salaries secret is that it is a preventative measure against anarchy. If people knew one another's salaries, or so the logic goes, there would be constant infighting, pettiness, and potentially people quitting to look for greener (and fairer) pastures. However, Burkus postulates that such a perception is actually the result of the secrecy itself rather than the information.

In his studies, Burkus found that when people don't know the salaries of the people around them, they're more likely to feel underpaid and discriminated against. While unhappy employees seem like anathema for a company, companies do have a theoretical reason to withhold people's salaries from others. When negotiating salary or raises, for example, companies would have more trouble if the employee new that information. However, one slip up -- e.g. a manager accidentally leaves a pay stub in the copier -- can lead to extreme turmoil. It is safer for companies to disclose that information up front and prevent this information asymmetry.