HOW PAY TRANSPARENCY IS BRINGING EQUITY AND LOYALTY TO THE WORKPLACE
By Shawn Stone
I really want to tell you about Buffer, but first we need to touch on a story from inside the glossytech space-colony that is Google. Back in July, you may have read about Erica Baker (@EricaJoy), who was compelled to tweet a play-by-play of the PR nightmare that led to her eventual exit from working as a Google engineer.
You can find a more detailed account (including full Twitter log) here, but the TLDR runs something like:
- Baker and a group of Google employees created a spreadsheet designed to collect and compare employee salaries. It caught on and spread quickly through Google's internal social network, eventually collecting salaries of as many as 5% of their nearly 60,000 employees.
- Employees loved it and many used analysis of the spreadsheet to justify asking for (and receiving) raises. This is especially important because (Erica implied) analysis showed potential unsettling trends relating to gender and ethnicity.
- Management pulled her aside and responded negatively to the spreadsheet. "Don't you know what could happen?"
- Management consistently denied Baker's peer bonuses (Google lets employees recommend one another for small, $150 bonuses when they do something great), while approving those of a white male coworker that was involved in the spreadsheet's creation. Oh yeah, Baker is black. Apparently that might be relevant when deciding who gets their bonuses?
In a world where salaries are routinely negotiated, it's no surprise that pay wouldn't turn out to be equitable across all lines. It's also no spoiler that management wouldn't want employees pointing that out (then they may actually have to pay people equitably).
Luke kills Heisenberg on page 596, and the new guy deserves $8,000 more than you.
The real surprise for most of you will be that Google was breaking federal law if they were actively discouraging employees from sharing their salaries with one another or punishing Erica for doing so. So sayeth the National Labor Relations Act of 1935!
Nearly every midsize to large company I've worked for has discouraged me from talking about my pay, and it's clearly embedded in U.S. workplace culture as a big no-no. It's easy to understand why, but it poses a sincere problem for employees and companies alike.
The issues that Erica Baker raised about gender and ethnicity play no small role in our culture. People hold different expectations and have different interpretations of actions among various groups. While a man negotiating might be interpreted as a positive trait in the form of confidence, management may see a woman in the same role as "pushy."
Faced with such a delicate problem, what's the 40th most profitable company in the world to do?
Buffer's Brilliant Solution
Buffer is a social-sharing startup and bit of a bamboo company, in that it's been growing quickly over the past few years. They've been a model for business transparency as a whole, and actively promote progressive, ethical business ideology. Google can take a lesson from them on many things, but for now let's focus on pay transparency.
Buffer has found a way to circumvent all that nastiness with disgruntled employees and defensive management. Presenting: Buffer's Transparent Salary Calculator App!
The app will tell you exactly how much you (or anyone else at Buffer) will make, and is based on a carefully curated formula that accounts for location, cost of living, skill level, dependents, and years working at Buffer (loyalty). The formula is readily available, and every Buffer employee has their salary posted publicly online (CEO included). This is a bit of an ongoing experiment and Buffer's tweaking things as they go, but so far so good.
Backing up the Buffer system, compensation data company PayScale surveyed more than 70,000 US employees and found that workers paid below market rate have higher job satisfaction when their employer is transparent about pay. Even more impressive, job satisfaction more than doubles from 40% to 82% when someone sits down and talks with employees about their pay.
No more worries about whether you're being underpaid, and no time wasted around the water cooler whispering rumors of secretive bonuses; there's just a clear and mutually accepted contract between worker and employer.
That's my kind of job. How about you?
What are your experiences with the salary sharing taboo?