Do you know the salary of every employee at your company? I think you should.
I mean, who is being protected by secret salaries? Certainly not the employee—the more transparent salaries are, the more accurately an employee can assess his or her value to a company.
You’d think that companies benefit from secret salaries and that’s why they keep them secret, but really, if salaries were 100% accurate—perfectly pegged at the employee’s worth to the company—then the company would have no problem revealing all salaries.
The only people who benefit from secret salaries is the human resources department. If they make an error, they can hide it. No one will know. And then they can make ten errors. Because no one knows if the secret salaries are hiding one error or one hundred.
So large companies keep salaries under wraps in order to hide all the mistakes, making the cost of transparency high. But today smaller companies often make salaries totally transparent.
I haven’t done it quite yet with my own company, but I’m going to. I’ve been giving everyone some data just to get them ready for the big picture. Almost everyone is not happy, because even in my little start-up, I’ve made salary errors.
For example, the person who was underpaid was not so much jubilant about a potential raise, but upset about his current underpayment. The person who’s losing the housing allowance mostly for tax purposes does not seem to mind. The person who is making way more than everyone else minds a lot that I’m planning on revealing everyone’s salaries. But honestly, I think that person will work much harder if everyone knows the truth. And it should be that way.
This experience has taught me that you should always try to get to a company that has out-in-the-open salaries, because that means you have more out-in-the-open managers—managers that have so much self-confidence in their ability to value accurately a business contribution that they can set airtight salaries and stand by them.
Of course, most companies are not there yet. Especially the larger ones. Fortunately a bunch of companies have arrived with tricked-out tools for figuring out what you should be getting paid. And what your co-workers should earn as well. Here’s a sampling of the top tier of those companies:
Payscale.com is my favorite. In fact, I like them so much that I was mentioning them in all my speeches and then I asked them to do a sponsorship with me. (And they did.) So, anyway, the reason I like Payscale is that they systematically collect data in very specific categories so you can match your situation—years of experience, geography, education—to get your real value in the market. Bonus: These are the people who bring you statistics on the real cost of corporate meetings.
Salary.com is a good one if you are trying to get a raise. Salary.com is not as thorough as Payscale with its data collection. So employers generally favor Payscale. But Salary.com skews higher than Payscale, so if you have to bring a first number to the negotiating process, use Salary.com. Bonus: These are the people who bring you the statistics on how much a housewife is worth.
But really, if companies are smart, the conversation about salary will go quickly. You tell the company how much you’re worth. You bring very good data to back that up, and the company pays it. Then other factors like company culture become much more important.
That’s where Glassdoor comes in. It’s US magazine for the company you are considering—a little gossipy, with first-hand information about companies from the people who suffer in them. Bonus: Glassdoor is a new company and there are not a lot of competing perspectives on the site yet. So if you drop a bomb about the place you work, it’ll hit hard.