Nobody Knows But the Boss
The New York Times runs an interesting article about a handful of firms considering moving toward a system of greater transparency about salary practices. Frustratingly, however, the articles gets through many, many, many words of discussion about the “don’t ask your coworkers what they make” convention that attributes the convention solely to American middle-class values. It seems to me, however, that there’s no way of understanding this phenomenon without recognizing that its traditionally been considered to be in the bosses interest to keep workers in the dark about salary scales. After all, management knows perfectly well what everyone’s earning. And management also has some sense of what everyone is worth. And management wouldn’t pay people more than management thought they were worth, but management would gladly pay someone less. If people learn what their colleagues make — especially those in comparable positions — they may get a sense of how much management actually thinks they’re worth.
That can lead to demands for salary increases as people push their compensation right up to the margin of what an employer is willing to pay. And worse, these kind of conversations can lead to really subversive activity like a desire to bargain collectively. But luckily enough, it’s impolite to do this:
“It’s a very American, very middle-class phenomenon,” said Ed Lawler, the director of the Center for Effective Organizations at the Marshall School of Business at the University of Southern California, who has studied salary transparency since 1962. “The way we were raised is that it was bad taste to talk about how much you make.”
A very American phenomenon and a very useful coincidence.
54 Responses to “Nobody Knows But the Boss”
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August 20th, 2008 at 2:46 pm
Nicely illustrated by a recent episode of Mad Men.
August 20th, 2008 at 2:52 pm
Good reason to go work for the govt. Everyone knows what everyone makes — and for that matter, any member of the public can find out as well.
Makes everything a lot less awkward at the office get togethers. Or more, I suppose, when you now that someone making two GS levels above you won’t just split the bill evenly.
August 20th, 2008 at 2:55 pm
Waitwaitwait … this is not an American phenomenon. I’m pretty sure that it’s almost impossible for public opinion companies to get useful income data in interviews with europeans. And I think if you talk about money in Japan you just lose.
August 20th, 2008 at 2:56 pm
The “middle class phenomoenon” is rooted in two things. First, it’s an aspirational act: the convention of the “old money” upper classes is “not to talk about money,” and the middle classes want to emulate that. The next part is that jobs in which the pay is standard and known is considered “working class,” and being middle-class means differentiating yourself from that.
So while the convention of not discussing compensation does serve the interests of management, management is also providing a convenient “class benefit” for their employees by encouraging such policies and behaviors. Granted, though, you can’t eat prestige…
August 20th, 2008 at 2:59 pm
It is illegal for bosses to attempt to restrict people from talking about salaries.
http://www.employmentblawg.com/2006/hush-moneynot-it-may-be-illegal-to-prevent-your-workers-from-discussing-their-salaries/
August 20th, 2008 at 3:06 pm
In my experience, it’s not considered ‘bad taste’ to talk about how much you make when you’re with friends; it’s only ‘bad taste’ at work.
August 20th, 2008 at 3:07 pm
This is about as backwards as it gets. It’s EXTREMELY rude to ask someone about their salary in every European country I’m familiar with, at least among the professional classes. By contrast, in America it’s starting to become more and more acceptable. I’ve heard about a half dozen anecdotes from Europeans who have been asked their salary by an American they basically just met, and they’re always like, “wtf?!!?”
August 20th, 2008 at 3:09 pm
At some companies, discussing salaries is a quick way to get disciplined – or fired. How convenient.
August 20th, 2008 at 3:23 pm
It would definitely benefit co-workers to discuss their salaries amongst themselves in a collective bargaining situation. But luckily for companies, its not only bad taste, but prudent to not talk about how much you make. Yes, companies are greedy and exploitative. But your co-workers may be greedy, exploitative, and envious. In my experience, many sibling rivalry scenarios make there way into office politics.
August 20th, 2008 at 3:40 pm
Greater transparency – without anyone knowing anything.
Rotsa ruck.
August 20th, 2008 at 3:43 pm
So MY, how much do you make?
August 20th, 2008 at 3:50 pm
Ask the NHL what happens when salaries become public knowledge.
August 20th, 2008 at 4:07 pm
At some companies, discussing salaries is a quick way to get disciplined – or fired. How convenient.
Convenient and illegal.
August 20th, 2008 at 4:14 pm
When I was working in India, I learned that it is very common to be asked how much you make, even by total strangers. It’s in the list of “nice to meet you” questions, not far behind “Where are you from?” and “What do you do?” Very bizarre.
August 20th, 2008 at 4:35 pm
its traditionally been considered to be in the bosses interest to keep workers in the dark about salary scales.
Especially the women, and especially after the recent Supreme Court ruling.
August 20th, 2008 at 4:43 pm
Back in the early 1980s, I worked for a branch of Ma Bell (BellLabs). In those days, everyone there got a single “salary action” once a year and all at the same time. And the day after I found out what my new salary was, there would be a survey on my chair asking me, anonymously, what my new salary was along with some other information like years of service, % raise and some other info.
This was all churned together by some group of non-management people and published to everyone.
Based on that you had a pretty damn good idea about what other people with the same responsibilities and same experience were making. And if you were out-of-whack with regard to that, well, you could complain to your boss.
There was no union there. But I also didn’t know anyone who didn’t fill out the survey. And everyone looked at the survey results as soon as they came out.
I’ve often wondered why more white-collar workers didn’t do this.
August 20th, 2008 at 4:45 pm
Yeah, I’m not buying this idea that people don’t talk about salary here because The Man doesn’t want them to talk about it. In my own life at least the taboo seems too ubiquitous to have much to do with pressure from employers. Granted, I am a bit uptight and intensely private, and obsessed with respecting the privacy of others. I don’t know how much money my brothers and my sister make, for example. If they buy a car, I don’t even ask them how much they paid for it.
As others have mentioned, many Europeans I know tell me discussion of salary is absolutely off limits in their countries, and that in some places it is even considered rude to ask someone what their job is, salary aside. They are sometimes irritated by Americans who bring up these issues in conversation.
I always thought the taboo was based on an egalitarian social norm to minimize the disclosure of class and merit distinctions in a group. Salary is one of the areas that differentiate some people from others on a scale that matters, and if salaries are discussed in a group, some people in the group are going to end up being embarrassed or demeaned, and others exalted over the group.
August 20th, 2008 at 4:47 pm
pfc: That is a really good idea for a big company. Avoids the nasty jealousy problems that can result from discussing salary with coworkers frankly.
August 20th, 2008 at 4:52 pm
Not all public-sector salaries are transparent…but they are getting that way. For example, all California state government employees can now be searched (http://www.sacbee.com/1098/story/738462.html). This includes professors at the University — which had been sidling away from its (in)famous transparent and public “ladder” faculty scales with lots of ’special deals’ that were not visible to fellow university employees. All that’s over, now, fortunately!
It’s interesting to see how private business lauds ‘competition’ and ‘free markets’ as their rock-firm principles until it’s time to illustrate how competition and market-pricing of skilled labor lead to different salaries in their own offices!
August 20th, 2008 at 4:53 pm
In my own personal middle-class experience I don’t ask co-workers what they make – and co-workers wouldn’t tell me – because I don’t want people to resent me if I make more, and I don’t want to resent people if they make more. I don’t think anyone at my office thinks that they could go running to management to complain about so-and-so making more and thereby get a raise. Most likely we would all just be made more unhappy because we know that management wouldn’t do a thing about it. We need our jobs, we aren’t likely to make enough more elsewhere to make it worth the upheaval, and management is happy to find someone else if we do feel strongly enough about it to leave.
August 20th, 2008 at 4:54 pm
People may also feel like they have no influence over management, whereas they may be able to impact the lives of coworkers. Human psychology fills in the rest, and gripes that should by any reasonable measure be taken up with management are instead focused on fellow workers who should by rights be allies.
August 20th, 2008 at 5:21 pm
I’m with JH and Dan Kervick – I’ve worked a lot in several European countries (UK, Netherlands, Germany, Norway) and you never discuss each others’ salary. As far as I can tell, it’s as Dan says – you don’t want to expose inequalities that could lead to envy and bad feeling. Americans seem to be less private about this stuff, if anything.
August 20th, 2008 at 6:35 pm
As a former HR person with some extensive exposure to salary discussions and data, what people really don’t get is that… much of it is not worth knowing. The decisions made around merit, perceived value and the like, are highly subjective ones, and really do need to be. It’s lovely to think that, in a perfect world, everyone in a sevrice oriented company (I was in marketing) would get the same money for doing the same things. But “the same things” is hard to quantify, and value has many considerations.
In the end, what I thought would be “incendiary” info I’d want to blab everywhere became the easiest secret I ever kept. Because what people want to know – that they have exceptional value, or that there’s “unfairness” in the system – can’t really be explained by a number, or a set of numbers. The perception of “fairness” comes when people feel they are treated fairly and that the process is understandable. And yes, all of that is tied up in social conventions which make it tacky to talk about money. But I do think that this is one thing where what people think they want isn’t actually worth wanting.
August 20th, 2008 at 7:13 pm
why is it egalitarian to minimize the disclosure of distinctions, rather than to minimize the distinctions themselves?
August 20th, 2008 at 7:27 pm
Because what people want to know – that they have exceptional value, or that there’s “unfairness” in the system – can’t really be explained by a number, or a set of numbers. The perception of “fairness” comes when people feel they are treated fairly and that the process is understandable.
What’s amazing to me here is a few things: first, that people aren’t constantly trying to find new ways of improving their “bottom line” when it comes to take-home pay. After all, their employers are doing that every day, even if it means eliminating your job. Second, that people are willing to trade compensation for a sense of “fairness” they feel, even if they end up on the “losing side” of the compensation game. And finally, that employers so commonly feel that providing basic things like “respect” and a “sense of fairness” are too much of a price to pay when it comes to employee compensation.
August 20th, 2008 at 8:06 pm
Chimpanzees. Jesus Baron von Christ!
Oh noes, I’ve been demeaned because I make $1,000/year less than you! I’m a pink monkey! I must commit suicide now! (Please – do!)
August 20th, 2008 at 10:26 pm
Ok, Matt. I guess I need to do this at every opportunity so you will understand why completely reasonable things are pretty much OUTLAWED in America.
If you lift the veil on salary secrecy, it’s the equivalent of unionizing the employees, and is therefore a form of communism. In RightWingNUT land.
Just stop suggesting intelligent, logical ways to fix our broken society. You’re just inviting the Red in.
August 20th, 2008 at 10:26 pm
Ok, Matt. I guess I need to do this at every opportunity so you will understand why completely reasonable things are pretty much OUTLAWED in America.
If you lift the veil on salary secrecy, it’s the equivalent of unionizing the employees, and is therefore a form of communism. In RightWingNUT land.
Just stop suggesting intelligent, logical ways to fix our broken society. You’re just inviting the Reds in.
August 21st, 2008 at 12:27 pm
1. This is a very important issue for women, as a commenter mentioned above, after the Supreme Court decided that to file a complaint of gender discrimination in pay, you must begin the process very close to the initial discrepancy. This is only possible if you know what everyone else is making.
2. You can argue all you want that workers ought to be demanding as much as they can throughout their careers regardless of what their coworkers make. But for many workers– and this is demonstrably true among women– negotiation is a skill they have either never learned or never been taught. It is much easier to know what kind of leverage you have if you know what the competition makes.
3. The only people who benefit from not sharing salary info is management. You can say you don’t share because of “values”–but who taught you those values?
August 21st, 2008 at 1:47 pm
Why does it matter? You either feel like you are being compensated fairly, or you don’t.
If you feel undercompensated, go to management, explain the basis for your feelings and ask for a raise. If they deny the raise you have the option to go somewhere else that will compensate you fairly (hopefully your assesment of how much you were worth was correct).
You don’t need to know what your co-worker makes to know what your value is to the company. Perhaps your co-worker began working for the comany when business was booming and there was a shortage of eligible worker; thus, his/her salary is much higher than what they are currently worth to the company. You just can’t use that as a basis for anything really.
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