The Biggest Obstacle to Pay Transparency

Clear-Salary was recently interviewed for an article and was asked what the biggest obstacle to pay transparency was. This question made us think. An initial reaction could be that not everyone wants it. But studies show that is not true—in fact, the vast majority of employees want pay transparency in some form. Instead, in our view, the biggest obstacle to achieving better pay transparency is an understanding of what pay transparency actually means.

Pay transparency simply means providing more information to employees about payment practices. There is no one set way to achieve this goal. It can come in a variety of forms from complete transparency to all employees and the public—such as what we often see in the government setting—to simply providing more transparency into payment calculations, formulas, and metrics that must be met for employees regarding their own compensation. There also are a variety of other measures on that spectrum that can help increase pay transparency without necessarily shining a light on every single individual’s compensation internally or externally in an organization.

Any increase in transparency helps the employees have a better understanding of the payment practices of an organization. And organizations that embrace pay transparency in some form will have the added benefit of increasing organizational trust.

With this in mind, the biggest barrier to pay transparency is that some organizations do not fully understand that there are a wide variety of measures that can be employed to achieve more transparency depending on what works best for your organization. There is no one-size-fits-all approach that must be mandated across the board. Instead, a lack of creativity and understanding is the biggest barrier in place that prevents employees from receiving the increased transparency that they desire.