For many employees, discussing pay with co-workers is something you just don't do, in part because employers -- especially smaller ones -- frown upon sharing such details. But no longer. As The Wall Street Journal reports, a small but growing number of private-sector firms are letting employees in on company secrets, including employee compensation.
And employers aren't just sharing that information internally. As NBC News reports, human-resource departments have shared 190 million records -- containing personal information for as many as a third of all U.S. adults -- with Equifax, the credit-reporting agency.
Behind the push for greater transparency within companies is a belief that sharing information helps to build trust among workers, and alleviates both employee curiosity and anxiety, says Kimi Mongello, office manager at SumAll, a Manhattan-based data-analytics company that has adopted the open-management approach.
"It's not like you come in and [pay] is posted on your forehead," the newspaper quotes Mongello as saying. But keeping company financial information, including pay, secret makes employees even more inquisitive, she says, adding that SumAll employees rarely look at the data. Further, workers hired into the company must be comfortable with the system.
The jury is still out on whether sharing information about pay is a boon for workers, in part because too little research has been done. Some women's groups have argued that salary transparency would more easily expose disparities in pay among male and female employees, perhaps leading to greater equity.
Further, a recent study showed that keeping wages secret can harm employees' performance. As Inc. reports, research by a Tel Aviv University professor found that pay transparency worked significantly better than pay secrecy in keeping employees interested and upbeat about their work.
But there are also downsides in making such information available to employees. Knowing co-workers' salaries, bonuses and performance appraisals, along with detailed company financials, can result in information overload or inhibit forthright communication among employees.
Conducting project evaluations, as an example, can be "totally awkward," with the entire office listening in, says Jessica Dugan, a senior design consultant at Peer Insight, a Washington, D.C.-based consulting firm. "You want to be a good colleague and give feedback that will help people improve, but that's hard to do in a public forum," Dugan told the Wall Street Journal.
Employees who object to sharing information on pay and other work-related information within companies will likely be more upset that a vast number of employers are sharing employment and salary records with Equifax, which then sells the information through its subsidiary, The Work Number.
"It's the biggest privacy breach in our time," Robert Mather, owner of employment-background research firm Pre-Employ.com, told NBC News. "It's legal and no one knows it's going on," said Mather, adding, "It's like a secret CIA."
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