Social media is altering the way employee salaries are negotiated and changed. It used to be that how much you were paid at your job was something you never talked about, especially with others outside your family and maybe your friends. However, a number of websites now allow employees to anonymously post their annual pay and provide an overview of salary ranges for various jobs at a given organization. Other websites collect pay data from market surveys and publish it online.62 This “social media-driven salary information” has shifted the balance of power in pay discussions.63 Although employers often may ask for salary histories of job applicants and desired salary, now job applicants and even current employees can be prepared with at least some salary information. Even if the data may not be totally accurate, individuals feel empowered to talk about what their expectations are about fair pay.
Recent surveys show that Millennials aren’t as apprehensive about sharing information about their pay with their coworkers as older workers are. Nearly half say that they would or do discuss pay with friends. Yet only 36 percent of Americans overall feel comfortable talking about their compensation with others.64 This attitude shift is forcing some employers to take a close look at their overall compensation and promotion system.
Although proponents of full pay transparency point out the benefits of sharing this information with employees, others say there are drawbacks.65 For instance, how does an organization reward individuals whose performance is exemplary, even though the performance contributions may not be visible to everyone?
This situation is quite common in organizations where work is highly collaborative and coworkers’ contributions may not be apparent to each other. That makes it difficult for everyone to agree on how those contributions should be valued. Another problem is how employees respond when they feel their pay isn’t “fair.” Often, resentment sets in, and dissatisfied/upset employees respond by decreasing their work contributions or by leaving. So, the goal of hoping to motivate and retain employees by sharing pay information might have the opposite effect.

Discussion Questions

1. Is salary transparency a good thing? Explain your position.
2. Will this trend toward salary openness affect how managers manage? If so, how? If not, why not?
3. Has social media’s role in pay transparency been a good thing or a negative thing? Discuss.
4. In your “assigned” team, discuss your opinions about sharing salary information. Work together to identify additional potential drawbacks of full pay transparency. Be prepared to share these with classmates.