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Pay Secrecy or Openness

A debatable compensation issue is the extent to which the pay of employees is
known by others in the enterprise. How would you feel if your co-workers could
find out what you make? Would you care? As with other issues, opinions differ.
There are degrees of secretiveness and openness on pay. In many institutions
and organizations, pay ranges and even an individuals pay are open to the
public and fellow employees. Examples are the public sector (federal, state,
and local governments, some universities, and unionized wage employees. This
is called the open system.
The opposite is the secret system, in which pay is regarded as privileged
information known only to the employee, her or his superior, and staff
employees such as HRM and payroll. In the most secrecy-oriented organizations,
employees are told they cannot discuss pay matters and, specifically, their
own pay. The National Labor Relations Board has ruled that this is not a
legitimate policy. Corporate presidents differ in their preferences for full
disclosure of employee compensation. For example, Robert Howell, TeleCheck
Services, believes that an open pay system is a