Is Pay Transparency a Good Thing?

Britains usually hate talking about how much they earn. But, goodness, how they love finding out other people's money! Remember at the beginning of Summer? That Pandora's box which opened when the BBC had to reveal what they pay the 'talent'? What a scandal! No one knew what to be more outraged by: the fact that some celebrities earn so much; the big disparity between the men and the women; or the fact that none of them are prepared to do such a (seemingly) jammy job just for laughs.

It was also a very good chance to make unfair comparisons ("What? Chris Evans earns 15 times more than the Prime Minister for THAT??!!) and the perfect opportunity for nosiness: a particularly British weakness, since, barring confidential papers left on photocopiers, we seldom have access to that information. It was, sadly, also a salutary exercise in making ourselves feel a bit bad - under-performing and just a little bit squalid.

But more interesting perhaps, is why we have such secrecy around the awards of our labours at all? After all it is not classified information. One theory is that we feel our salaries reflect more upon our status than they actually do. No survey would place a higher value on a city trader than a paediatric surgeon, even though the former earns many multiples of the latter. Yet when it comes to our own salaries, we feel shy about confessing in case we are giving away too much about yourself. Let alone discovering one of your peers has negotiated a better package.

Our fear of being under-valued goes deep. A psychological study once revealed that most people would rather earn less actual salary, as long as they knew they were the top earners in the group, than earn more money but be at the lower paid band. The key seems to be that it isn't how much we earn that matters - but it matters a whole lot if others are earning more. It seems like we want to be the top of the pile, however low that pile is, and this gives us a big clue as to why we're reluctant to discover where we sit within it.

Yet this secrecy is self-fulfilling. The less is shared amongst peer groups about how much they earn, the more anxious people feel about how they might compare. And it's just possible they may not trust employers who tell them their earnings are in keeping with industry standards - especially when no one knows what those standards mean in actual currency.

Perhaps the answer is to adopt role-specific salary bands, as they do in public service roles, like teaching, medicine or the civil service. Then at least everyone knows the broad territory they should be in and there is allowance made for what psychologists call, 'individual differences'? Or perhaps we should all take a deep breath and be as open about our salaries as we are about our house prices?

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