Why should salaries be kept in secret?-Publication

It is not customary to discuss salaries in Russian companies. Certain managers may impose fines or even dismiss employees for this sort of conversations. However, surveys indicate that employees would still have heart-to-heart talks and everybody generally understands how much the other employees make. Why should salaries be kept in secret then? Employers and head hunters would like to share their views.

Alena Vladimirskaya, Manager, Antislavery Project:

If a company discloses its payroll information, it may face the risk of losing its employees. The best of them will desert to competitors, as they will be easy to hunt. Just offer them 30% more, and most people will leave.
Moreover, grievances will arise immediately. Every person thinks that he is the best. Few people would confess to themselves that they earn less than someone else because the latter works better. On the contrary, most people will start telling the others that they are underestimated.
I think that employees should not have any payroll information, except for the salary variations for different positions. And they should also be aware of the things they need to do in order to be promoted.

Olga Filatova, Vice President for HR and Training Projects, Mail.Ru Group:

A transition to open salaries should be properly planned. The company must have a stable structure in order to adopt a hierarchy of positions and peg it to the market.
In the US, certain states (for instance, California) now want to make employers publicise the amounts in vacancy descriptions. Moreover, it has been proposed to ban any questions concerning candidates’ previous income.
If a company has a powerful trade union, information on the rates is always open and uniform. Similar positions will be remunerated similarly. You cannot give somebody a raise without giving it to the others. The same concerns bonuses.
Every business project in Mail.Ru Group has its individual approach. We have around 40 in total: some of them came from outside, others took root within. We take the preferences and potential of each individual project into account and help to adapt its compensation plan to its specific features.

Elena Kovalenko, Director, Profgallery.ru recruitment company:

In most Russian companies, it is considered bad style to discuss your colleagues’ incomes. At times, managers would take a hard-line stance and impose an official ban by including it in the employment contract. I know why they do it: in 90% of instances, an employee learning that his colleague earns more will start going to job interviews or asking for a pay rise.

Roman Alekhin, CEO, Orto-Doctor chain (Kursk):

Open salaries may be a good incentive, for instance, in case of sales managers. But unfortunately, we cannot put our best sales people’s final salaries in open access. Base salaries differ in different parts of the country. It occurs that specialists with mid-range indicators earn more than people with top-range indicators.

Inna Sumatokhina, Managing Partner, Marksman recruitment company:

Open salaries provide no benefits. I encountered a situation when employees’ salaries in a major bank became available to the entire office by mistake. The job climate turned dense: gossip, infighting, silent hatred.
An employee does not need to know how much his colleagues make to be happy with their jobs. It is crucial that he is aware of the steps he needs to take in order to increase his income.

Ekaterina Boitsova, HR Director, BDO Unicon Outsourcing:

Our company has banned any conversations about salaries. We make all potential employees aware of this ban as early as at the job interview stage.
Employees do not need to know how much their colleagues make, except for the instances of piecework pay. You earn as much as you produce or sell. In such cases, the employer even benefits from transparency, as it introduces competitiveness in the work process.

People often underestimate the others’ experience, expertise, and skills. You would hardly want to explain why a certain Maria earns that much more to five in ten people.
After learning that his colleague’s salary is higher, an employee may start blackmailing you with resignation. Let’s assume you give him a raise. But should this occur, he will definitely tell his colleagues about his achievement, and tomorrow you will have a line of those who want to have a pay rise in front of your office.

The optimum solution for any company is a wage rate scale that clearly specifies the grades and incomes that correspond to this or that position. By contrast, the amounts of individual allowances and bonuses should not be disclosed.

Sergey Parkhomenko, Managing Partner, Ideas & Solutions PR Agency:

I think that many Russian companies would like to disclose at least the fixed salaries, but are unable to do so, as they don’t pay all the taxes. For instance, this is the situation in the market of PR and consulting services. There is always a risk that employees will start blackmailing you threatening to contact the tax inspectorate.

We have been quite open for a number of years. Fixed salaries are available to everybody. We have a transparent bonus system, even though we do not disclose the bonus amounts at our employees’ requests.

I personally disclose my entire income from time to time, including the bonuses. But my colleagues may choose not to do so. This is a personal decision.

Angelina Krasheninnikova, HR Manager, Tochka Bank:

Open salaries are good for start-ups and companies structured as holacracies with a clear description of circles and roles, obligations and metrics.

If employees know the initial salary, all the bonuses for excess hours, new skills, length of service, etc., see each person’s contribution to the common cause, realise how they can increase their income, no problems occur.

Tochka has open salaries within individual circles. These include, among others, the online office and the compliance function (complaint management department – Secret’s note).

Traditional arguments of those who oppose transparency include the risk of pay rise requests with domino effect and waste of time on backstage conversations. “I have served longer, but make less”, “I work harder and better, but make just as much as my neighbour,” and so on. There are legal issues, as well: income information is classified as personal data.

Problems may be solved if you introduce intelligible and measurable indicators depending on the quality of performance. For instance, customer satisfaction, a number of tasks, level of expertise in a specific field.

Source: secretmag.ru