One approach to reward communication suggests that withholding from each employee details of the pay received by their fellow employees may restrain their demands for pay increases. In other words, revealing all may just encourage pay 'ratcheting', that is, employees in the same job or role demanding the same level of pay as that received by the highest paid employees in that role. The alternative approach proposes that pay secrecy of this type stands to violate the right of the employee to be treated with dignity and respect. Moreover, revealing more detail on reward leveis, it is suggested, stands to reduce potentially counterproductive rumour and speculation about who has received what and why this might be so.

Questions

1 In what circumstances might pay secrecy be appropriate or justified?

2 Can an organisation have too much pay transparency?

3 When and how should reward information be communicated to employees?