It seems like this could be fairly easily resolved by the management having a rigid "we pay everyone the same, deal with it" position, perhaps up and and including a formula for salary computations.
You don't have to pay everyone the same. Just be ready to justify why one gets paid more than other. CEOs have pay transparency but somehow the world doesn't go under.
Went to your profile out of curiosity to see if your employer is public. The linked site in your profile is... odd. Has the site been compromised or am I missing the joke?
Shareholders hire CxO level people to deal with day-to-day minutiae of running the company. There're other metrics (see SEC filings) that help shareholders gauge whether CxO people are doing their job.
Get ready to see a) people gaming the formula and b) talent leaving because they feel like they are paid the same as people who contribute less.
Edit: Not that it isn’t currently gamed and not that this doesn’t already happen: I’m pro pay transparency but there aren’t any magic fixes here, this is a really complicated social issue.
Something like Buffer's formula (https://open.buffer.com/transparent-salaries/) isn't really "gameable", as far as I can tell. And the counter argument might be that you'd attract talent that appreciates the transparency.
I'm curious what talent would appreciate the transparency? The only thing I can come up with is "average" talent.
The high performers will view it has a hard cap on compensation and look elsewhere, in my experience at least. Obviously this cannot be entirely correct, but it's hard for me to get into the mental space of someone who wants to be paid exactly as much as their peer sitting next to them. In my career I've always wanted to outperform the next guy - and be compensated accordingly.
I say this as having been both a high performer and an under performer. In the hard personal years where I am underperforming I would love transparency and know what to expect. In the years I was "crushing it" I'd have set myself back financially by a decade+ had I simply been okay with the average compensation for my position.
I mean, as long as we're trading unverifiable anecdata, I've known high performers who were being underpaid because they were recently out of school or came out of non-traditional backgrounds. I suspect they would have appreciated this kind of system.
And the only people I can think of who would prefer the existing opague system would be those who benefit from it: management and people receiving outsized salaries for some anti-merofratic reason.
That was me! I can say without a doubt I quickly learned to only work for small companies where I reported to the owner directly. This enabled me to get 50% raises YoY when starting out - where my corporate job was limited to the typical "well, that wouldn't be fair to the rest of the group" style politics.
I would say it's vastly more important to the hypothetical vulnerable high-performer than the guy graduating MIT or Harvard working for Google. They start at an extremely high salary and will do fine no matter what. The high performing high school dropout needs rapid massive raises just to eventually get to par with the other group - assuming similar performance.
I can almost guarantee you that if salaries were transparent it would have been a huge scandal in a few of the companies I worked at since I was making 2-3x the wages of those next to me. It would have been untenable for those managers to pay me that, even though/if I were worth it - they'd have done nothing but deal with politics and fallout from it. I still believe I was underpaid in most of those positions compared to the folks they had working there.
Egos are easily bruised. When that 19 year old high school dropout is making more than the 45 year old with a degree people start to complain. Loudly. They don't even look at work output or performance - it's utterly irrelevant to most.
I see both sides to this, but I'm relatively certain salary opaqueness helped me through the start of my career. Now? Maybe not as much. It's much harder to stand out at an exceptional level once you reach a certain point.
Discriminating wages on arbitrary criteria like geographic location goes against equal work = equal pay and that compensation should be based on contribution [1].
Location base: For the other 65% of the base, we factor in each location’s cost of living using Numbeo together with data from Payscale and Glassdoor, which we then use to have a base salary for that particular location (say New York or Cape Town).
Ok, but that's not really my problem. That's bad management, because they're apparently carrying around a bunch of dead weight and not doing anything to correct that problem.
I'm not sure why you think that. At least in Germany, if an employee can't do the work they are obligated to do by their employment contract, they are in violation. After they have been notified of the violation (or if it is obvious, e.g. because they didn't even go to work), it is their duty to correct that. If the employee is unable to satisfy the requirements, they can be terminated with an appropriate notice period.
The process may not be fast, but for a useless employee, it would be difficult to claim that the termination was unjustified, so the outcome is essentially guaranteed. I would call that easy (as opposed to simple).
Yes ... and this is a major drain on EU companies that make them less competitive than companies with "at will" employment. They can't fire low-performers easily, and they can't afford to take a gamble on people since firing them is so difficult if they don't work out.
That's mostly propaganda and the fear of "socialist" Europe its actually quite easy to remove people for poor performance assuming it is really poor performance or trying to avoid redundancy.
If its so easy to fire in the USA why is hr so paranoid about it
In the UK you can be fired within the first two years without reason (unless it's connected to a protected characteristic). After two years you can still be fired - the company just has to follow a simple procedure of giving you some warnings before firing you.
Employer tribunals are not free and are intimidating to use, so many people who are wrongfully dismissed don't seek justice.
Having had to fire someone who had been at a company for more than two years, I can say it was anything but a simple procedure: it involved a performance improvement plan which lasted interminably (and actually sapped a really surprisingly large amount of my own time...) and it became an awful lot more complicated when it turned out the guy was on anti-depressants. In the end, HR suggested I take the guy to the pub for lunch and they told me a series of things I could say to encourage him to quit but which couldn't possibly be construed as constructive dismissal; thankfully over lunch he told me he'd got another job offer, and I walked him out of the office the following day with a great sense of relief.
That's not a problem with equal salaries. Even if salaries are opaque, underperforming or lazy colleagues lower morale. Incentives can still be given by allowing people to quickly move up the ranks if they perform well.
Paying everyone the same is the right policy if everyone is equally productive. That equilibrium might be reached by the “overpaid” ones getting better (or leaving) or by the “underpaid” ones getting worse (or leaving). One can fairly easily predict which of those scenarios is more likely.
Which is the precise reason I fled union work when I was younger.
I got sick of being compensated the same (typically worse) as the worst employee on the floor, while doing 5-10x the productive output.
All these policies do over time is ensure you lose top-tier talent and eventually get stuck with a lot of middling folks who are content with the status quo. This can be a good or a bad thing, depending on who you are.