Perceptions of Pay Secrecy

This post was contributed by Karen Drury, an alumna of Birkbeck’s MSc Organizational Behaviour.

I invariably enjoy the Birkbeck Business Week because it brings me up to date with the latest research interests of the School and fires up the Quattro grey cells.

This year was no exception – there were sessions on the impact of induction on employee identity and a session on the current darling of the consulting world, employee engagement.  Being the critical sort – Birkbeck had taught me well! – I was pleased to see Teaching Fellow Richard Williams was as healthily sceptical as I was.

But one of the most interesting sessions for me was Julie Dickinson’s presentation of project work on pay secrecy.

Academic research here is scarce – well, it is secret – and Julie gave some of the assumptions about the potential pros and cons of keeping pay under wraps.

It doesn’t seem to be a uniform phenomenon; the well paid would rather keep their payslips close to their chests; the less well-paid appear to talk more openly about it – possibly to complain?

The research – such as it is – is not only contradictory but also fairly difficult to compare.  Studies look at perceptions and employee outcomes from pay secrecy, but they look at slightly different variables.  And therefore reach different conclusions.

A lively discussion pondered whether pay secrecy isn’t more about the inability of organisations to properly define the value produced by different jobs than it is about a need to keep compensation private – although obviously privacy does come into it.  Some people thought that openness about pay may lead to “poaching” key staff – although a recruiter in the audience said that it was rare that she saw people being overpaid against the market average when pay secrecy was written into their contracts.

A key point about pay secrecy was the opportunity it gives for increasing pay inequality by the back door. There was a lot of discussion about the transparency supposedly inherent in the public sector (every senior civil servant had their salary published in bands, someone pointed out) and lacking in the private sector.

My own view was that inequality in pay seems to be in place regardless of how transparent pay is – there are plenty of women in the public sector who are paid less for doing more work than their male colleagues….

An interesting discussion, even without the solid empirical evidence.  Perhaps because of it!

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