Buffer , a social-sharing app and site, recently announced that as part of its strategy towards workplace transparency it has decided to open up every single employee’s salary on its website:
“Its salaries formula, used to calculate what each worker will earn as they join the company, has become more nuanced and is being emulated by startups such as Groove and CustomerIO, says Gascoigne. Buffer also plans an “open equity” program where everyone knows how shares are divided… It takes a certain kind of person to work at Buffer, Gascoigne says, listing traits such as empathy and gratitude – in addition to being very good at the core job skills… “The percent of people who were a good culture fit was a lot higher after all the media coverage of sharing the salary of every person on the payroll,” he said. And of workers turned off by it, he says, “it scares the right people away.” Qz.com
The question is whether the move towards workplace transparency should include transparency of salaries and what the implications could be. Will this eventually become normal across businesses around the globe or is it just a fad? One year ago I wrote about this question and doing an update today has highlighted some interesting developments in a country which has had some level of salary transparency since 1863 – Norway.
Cultures and Transparency
A country’s culture usually dictates what is considered acceptable in its society and what is not. Certainly the UK culture regarding salaries has always been – until now at least – a pretty taboo subject – even amongst the best of friends.
Last February I compared the UK’s attitude towards this with Norway where at the time anyone could go to the Norwegian mainstream newspaper Aftenposten’s website and with one click check out the norwegian tax list which shows a large proportion of the country’s tax payers’ details including their annual income, tax paid, value of investments and date of birth. For those in the UK this would seem a gross intrusion into private lives but for norwegians they have never really had much choice – tax and income records have been publicly available since 1863. This transparency dates back to the deeply rooted Norwegian culture which prescribes egalitarianism, collectivism and conformity as values to be protected and practiced by its citizens – Janteloven (Jante Law).
Until 2001 the norwegian tax and revenue list was openly available but only via the tax office in paper format, therefore it was an effort to go and search through it. But in 2008 the government made the list available to the media enabling newspapers such as Aftenposten to give instant online access to all via a searchable database on their websites. As Channel 4 noted in 2012:
“Jan Omdahl, from the tabloid Dagbladet, wrote at the time: “Isn’t this how a social democracy ought to work, with openness, transparency and social equality as ideals?” However a poll carried out in 2007 found most of his countrymen disagreed: just 32% thought the list should be published, while 46% were opposed… What some see as an honest commitment to fairness is for others, an invasion of personal privacy, and a licence for what the Norwegian tabloid Dagbladet described as “tax porno”…”
As if this wasn’t bad enough it was Dagbladet who in 2009 even offered their readers the chance to automatically check and compare the income of their Facebook friends and to offer the service as an iPhone application – leaving Trine Skei Grane of the green party Venstre to comment how:
“We took part in opening up the system, but now the principle of openness is totally out of proportion” BBC, 2009
So even in a country where salary transparency was generally accepted people do have their limits. The ease of availability and what can now be done with personal data proved to be a step too far. When I wrote my post last year the media still gave direct online access to tax and salary details – but following much controversy the Norwegian government has now stopped access of online information via the media – you now have to enter the Tax Administrator’s website to find out the information instead:
“Today, the tax assessment for 2012 laid out, and we can probably immediately seek to arrive at what neighbors, friends and colleagues in income and wealth and what they paid in taxes. Certainly, the search has become more complicated since one must now enter the Tax Administration’s website and log in with MinID to access the information. But despite the fact that one can no longer use the readily available search engines on the newspapers’ websites, the search activity still great. The IRS reported, for example, that in 2011 was over 700,000 users conducted 13 million searches on the tax rolls for 2010… Knowing that your neighbor can see what you earn, prevents any cheating. If there is a large gap between income and living standards observed that consumption of cars, boats and cabins, a risk being suspected of evading income from taxation. Such suspicion means lost reputation in the family and community, and some also possible to call phoning the Norwegian authorities.’ Aftenposten, October 2013, translated by Google Translate
The Norwegian government holds the view that the ability for everyone to check out their neighbour’s details easily through the internet must be a positive thing as it leads to less tax cheating and reduces the shadow economy…
Interestingly Valve who are adopting the ‘radical transparency’ approach recently introduced the holacracy model by eliminating the typical corporate hierarchy and have a stack ranking system where staff working on the same project rank each others’ technical skills, productivity and other contributions which helps determine who gets paid what – so salaries are, to a certain extent, open. Professor Oswick of Cass Business School warns that it could go awry were the firm to face a financial setback:
“Peer-pressure is a fantastic way of organising a business,” he says. “And so long as everyone is well paid people don’t mind being in the bottom earning quartile. But as soon as resources become more scarce, then competition increases, which creates conflicts, which creates tensions, which creates hierarchies, which creates concern about relative positioning.”
And bear in mind that this scenario could occur when employee salaries are known by only those within the company let alone being displayed openly to the public.
So perhaps ask yourself again – it may seem quite cool to some, but is having your salary details made available on your employer’s website really what you want?